Globant Q2 2025 Earnings Report

Globant EPS Results

• Actual EPS: $1.53
• Consensus EPS: $1.52
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $1.51

Globant Revenue Results

• Actual Revenue: $614.18 million
• Expected Revenue: $612.66 million
• Beat/Miss: Beat by +$1.52 million
• YoY Revenue Growth: +4.50%

Globant Announcement Details

• Quarter: Q2 2025
• Date: 8/14/2025
• Time: After Market Closes
• Conference Call Date: Thursday, August 14, 2025
• Conference Call Time: 4:30PM ET

Globant (NYSE:GLOB), together with its subsidiaries, provides technology services worldwide. It provides digital solutions comprising blockchain, cloud technologies, cybersecurity, data and artificial intelligence, digital experience and performance, code, Internet of Things, metaverse, and engineering and testing; and enterprise technology solutions and services, such as Agile organization, Cultural Hacking, process optimization services, as well as AWS, Google Cloud, Microsoft, Oracle, SalesForce, SAP, and ServiceNow technology solutions. Further, the company provides e-commerce, conversational interfaces, design, digital marketing, and digital product delivery services. Additionally, it operates Augoor, an AI-powered platform; MagnifAI, an AI-powered solution for software quality assurance; StarMeUp, a science-based AI platform; WaaSabi, a finance platform; Walmeric, a lead-to-revenue management platform; GeneXus, a suit of AI development tools; Navigate for process optimization powerhouse; BeHealthy, a white-label platform; and FluentLab, an AI conversational and engagement solution. The company offers its services to various industries, including media and entertainment, professional services, technology and telecommunications, travel and hospitality, banks, financial services and insurance, consumer, retail and manufacturing, health care, and others. The company was formerly known as IT Outsourcing S.L. and changed its name to Globant S.A. in December 2012. Globant S.A. was founded in 2003 and is based in Luxembourg, Luxembourg.

Globant Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: In Q2, Globant delivered $614.2 M in revenue, up 4.5% year-over-year, and reported an all-time high pipeline of €3.7 B, a 25% increase from last year.
• Positive Sentiment: After one quarter, 18 clients have adopted Globant’s AI Pods subscription model, driving significant pipeline growth with a consumption-based pricing aligned to outcomes.
• Negative Sentiment: Globant executed a business optimization plan that included a reduction of approximately 1,000 employees (about 3% of the workforce) and recorded a one-time charge of $47.6 M, aiming to generate $80 M in annualized savings.
• Positive Sentiment: The company expanded its AI ecosystem through strategic partnerships, including multiyear collaborations with OpenAI, AWS, a Sport Tech venture with La Liga, and an investment in robotics integrator InOrbit.
• Neutral Sentiment: For Q3 2025, Globant expects at least $615 M in revenue (+0.1% y/y), a non-IFRS adjusted operating margin of ≥15%, and for full-year 2025, revenue of ≥$2.445 B (+1.2% y/y) with EPS of ≥$6.12.

Presentation

[Arturo Langa, Investor Relations Officer at Globant]

Good afternoon, and welcome to Globant's second quarter twenty twenty five earnings conference call. I am Arturo Lange, investor relations officer at Globant. All participants on this call will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded and streamed live on YouTube.

[Arturo Langa, Investor Relations Officer at Globant]

By now, you should have received a copy of the earnings release. If you have not, a copy is available on our website investors.globant.com. We will begin with remarks by our chief executive officer, Martin Migosha our chief financial officer, Juan Ortiaghe and our chief technology officer, Diego Tartara. This will be followed by a q and a section. Before we begin, I would like to remind you that some of the comments on our call today may be deemed forward looking statements.

[Arturo Langa, Investor Relations Officer at Globant]

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 reconciliation of IFRS and non IFRS measures at the end of the press release we published on our Investor Relations website announcing this quarter's results.

[Arturo Langa, Investor Relations Officer at Globant]

I will now turn the call over to Martin Migosha.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Good afternoon, everyone, and thank you for joining us once again for Globant's quarterly earnings. It's always a pleasure to connect and share how we are continuing to evolve and improve. For us, innovation and reinvention are an occasional events. They are part of our DNA. And right now, we are building on that tradition with a clear and steady focus on the future.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

In the second quarter, we delivered revenue of 6 and €14,200,000 representing 4.5% year over year growth. Our pipeline is at all time high, euros 3,700,000,000.0, up 25% from last year. Although the macro environment has extended sales cycles, our teams are laser focused on converting this pipeline into signed work in the coming quarters with large potential deals in healthcare, financial services, CPG and gaming among others. These large engagements, many already in advanced stages, position us well for conversion in the coming months, reinforcing our focus on high value clients with strategic impact. Internally, we're fine tuning the organization to be not only more efficient and profitable, but also more nimble and better aligned with the needs of the next generation of business models.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Our aim is to ensure Globant is structurally agile and positioned to compete and win in an evolving landscape while continuing to deliver strong results for our shareholders. Juan will walk you through the details shortly. Globant's AI Pods, which I introduced last quarter, are the virtual teams for the digital workforce. They are powered by AgenTik AI and orchestrated by our experts. The way companies access our AI pods is unique in the industry through our monthly subscription model.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

It is a consumption based outcome aligned pricing that provides guaranteed time and cost savings, shifting the value proposition to concrete results. After just one quarter, we already have 18 clients who have chosen this new model and our subscription model accounts for a significant portion of our recent pipeline growth. We look forward to expanding this in the future. The AI world is moving at incredible speed, and there are two major races going on. The first is our who builds the best foundational models or agents, and that race is OpenAI, Anthropic, Meta, xAI and other.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Every week, new models, frameworks and tools emerge, but this is not our race. The second is about who applies AI better, faster and with greater return on investment on specific business cases for every company in every industry. For companies, the expansion of all these new foundational models presents an immense opportunity, but also a challenge of determining the right combination of models, tools and approaches for their specific needs while managing data privacy and compliance. It is more like entering in a dense and constantly changing forest where familiar paths disappear and new ones open overnight. In that environment, you need not just a map, but an experienced guide who knows how to adapt the route as the terrain shifts.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

At Globant, we take on that road, helping our clients find the safest and most effective path forward. We remain 100% client centric while leveraging our deep partnerships with all major AI leaders to ensure our clients get the best of each ecosystem. This means we can select or combine the most advanced models and capabilities available in the market, integrating them in ways that are tailored to each unique task and business context. Global Enterprise AI is the toolkit we bring into that complex forest. It is a golden path for our customers' generative AI adoption and impact.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Offering seamless access to all major LLMs, it provides traceability, auditability and granular access and cost control. It includes a library of hundreds of industry tailored plug and play business processes and state of the art retrieval augmented generation pipeline optimized for proprietary corporate data, delivering faster, more relevant and contextual precise insights. Enterprise AI integrates with major enterprise platforms, manage AI driven workflows across departments, connects human teams with intelligent agents and is fully compatible with A2A protocols and MCP servers. The platform uses a token based execution model to align AI usage to measurable business value. We'll launch the two point zero version of Global Enterprise AI.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Diego will go into more detail on this shortly. When you combine that with the industry specific expertise of our AI studios, you get a fully integrated engine for transformation across the entire AI value chain. We go beyond offering AI services. We architect and connect every layer of the AI stack, then deliver it as scalable subscription first solution. Our AI studios continue to drive deeper engagement with major global clients, unlocking cross selling opportunities and deploying specialized talent from across our global network and restricted by regional boundaries.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Part of growing is partnering with the best. A couple of weeks ago, we announced a multiyear collaboration with OpenAI as one of their few global services partners. By combining their world class models with our engineering capabilities, we're delivering secure, responsible and scalable AI adoption worldwide. We're already integrating GPT-five across all layers of our enterprise AI platform and embedding it into our AI pod processes. Along a similar line, days ago, we took a big step forward by becoming one of the few global partners to sign a strategic collaboration agreement with Amazon Web Services.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Diego Tartara will expand on this later. We have teamed up with La Liga, Spain's premier football league, on a multiyear transformation program through Sportian, our Sport Tech joint venture. This is not just a technology project, it is a game changer. By embedding our AI pods at the heart of their operations, we will unlock the full power of AI agents in sports to boost team performance, deepen fan engagement and drive operational excellence across the league. It is a clear example of how global enterprise AI is helping world class organizations to embrace AI at scale and win in the most complex high profile arenas.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

We have strengthened our position in the robotics and AI ecosystem by investing in InOrbit, a leading robotics integration company. This expands our capabilities, enabling advanced orchestration of different fleets of robots and autonomous systems across industries. It ensures we can integrate physical automation into enterprise workflows at scale, connecting AI agents not only to digital process, but also to real world robotic operations. Today, our revenue mix is more diverse than ever. North America remains our largest market with 54.1% of our revenue.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Latin America accounts for 19.7% and is showing strong recovery with new records in bookings. Europe represents 19.6% and is our fastest growing region sequentially, up 8.1% with major wins in aviation and financial services. New markets grew an impressive 84% year over year and is currently 6.6% of our total revenue. The Middle East leads this surge driven by our work on several giga projects. Our 100 Squared program continues to gain momentum with our client base growing and diversifying.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

And Diego will share more on recent client wins and large scale engagements that illustrate this strong momentum. 49 clients now generate more than €10,000,000 in annual revenue, up from 39,000,000 a year ago. Three thirty nine clients generate over 1,000,000 annually, up from three twenty nine last year. Over the past twenty one years, we have earned a unique position in our industry by fusing advanced technology, human creativity and a deep understanding of our clients' needs. In 2025, the complexity of the environment is matched only by the scale of the opportunity as AI redefines business models, value chains and competitive advantage.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Our mandate is to help clients navigate this change with precision and foresight, capturing value across every layer of the AI stack. With AI Pods, our subscription model, AI Studios and the 100 square approach, we're delivering Globant as a full stack AI company, one that designs, builds and integrates technology platforms and industry specific expertise into scalable solutions. This integrated model ensures we remain not just relevant but indispensable as enterprise embrace the AI powered future. We're as energized by the challenges ahead as we are by the opportunity. And with this team, I have no doubt we will capture them all. Thank you very much.

[Diego Tártara, Global Chief Technology Officer at Globant]

Hello, everyone. I'm happy to be back. I want to expand on the offering of Globant's Enterprise AI two point zero version that now includes MCP and agent to agent and the marketplace of agents for its users among other new features. It enables a full AI adoption addressing three core needs of our clients. First, Governance.

[Diego Tártara, Global Chief Technology Officer at Globant]

Organizations need to be in control of their own AI journey with strong security, risk management, traceability and guardrails for both models and conversations. Global Enterprise AI provides leaders with the control they need to map their exposure to both cost and risk. Second, build capability. Companies need the tools to create and deploy solutions connected to the enterprise systems. Globant Enterprise AI platform is home to the Lab for agent creation, orchestration and ensuring interoperability.

[Diego Tártara, Global Chief Technology Officer at Globant]

As of this quarter, the Lab now supports the Model Context Protocol and the Agent to Agent Protocol. These enhancements allow seamless integration of agents and tools from across the AI ecosystem, like Google Cloud, Azure AI Foundry and Amazon Bedrock. And third, impact, the ability to explore, combine and share solutions and to operate them so they can generate measurable business outcomes. This is where AI moves from pilot to scale adoption, ensuring that investments translate into tangible value across the organization. In this layer, we have recently launched a specific module for our clients called the Station.

[Diego Tártara, Global Chief Technology Officer at Globant]

It offers a curated, searchable library of in house built AI agents tailored to diverse business and industry needs, streamlining discovery while removing friction. With just a few clicks, users can now deploy agents via intuitive orchestration tools, speeding time to experimentation and value. Organizations using Global Entrepreneurial have reported an 80% reduction in legacy systems modernization times and a 50% increase in software development costs. Globant Enterprise AI also powers a lineup of hundreds of industry specifications, along with three flagship agents, tailored to each of our core studios. Globant Coda is our agentic suite for our digital studios, a key component of how we're reimagining software development life cycles and how we deliver value.

[Diego Tártara, Global Chief Technology Officer at Globant]

Navigate for our Enterprise Studio, it optimizes business operations and performance. Infusion from GAD Studio, launched at Kangneons this year, it enhances full funnel marketing, communications and advertising. It streamlines processes from content creation to campaign optimization. Now let's discuss our work with some fascinating clients as we partner with them on their reimagine journey. In gaming, we're working with one of the leaders in producing real time three d content to deliver interactive solutions to high growth sectors, including digital twins, automotive, healthcare, life sciences and manufacturing.

[Diego Tártara, Global Chief Technology Officer at Globant]

By employing our global delivery network, we will be helping this company to expand to new commercial markets, unlocking new business for them. On the technology side, we will be integrating their products into enterprise technology stacks, supporting new go to market strategies and co developing tailored solutions. Our sustainable business studio is proud to be collaborating with the worldwide Fund for Nature. Together, we are developing tools that link traceability with carbon footprint assessments. This initiative engaged multiple stakeholders, including national agribusiness entities, industry leaders and civil society, facilitating the transition towards more sustainable meat production practices.

[Diego Tártara, Global Chief Technology Officer at Globant]

The complexity and the time sensitive nature of the challenges the WWF faced led them to enlist our Low Code GeneXus platform. This collaborative effort will accelerate the adoption of sustainable practices, support regulatory compliance, and empower producers globally. We are excited to announce a partnership with a world leader in premium spirits to develop a generative AI powered commercial insights agent. This innovative tool will provide our clients' employees with immediate access to critical data insights, streamlining decision making in product development, marketing, sales and strategy. By automating data retrieval, we are helping them to reduce the time and costs of traditional business intelligence workflows, allowing the teams to focus on strategic initiatives.

[Diego Tártara, Global Chief Technology Officer at Globant]

The agent will enhance efficiency through self-service decision support and tailor recommendations. This initiative is just the beginning, as the commercial insights agents will lay the groundwork for future applications in brand planning, commercial forecasting and innovation. We are redefining the potential of AI powered enterprises and unlocking new growth opportunities. Regarding our partnerships, days ago, we advanced our relationship with AWS by establishing a strategic collaboration agreement to accelerate AI adoption and enable Globant to provide clients in specific industries with enhanced support for cloud migration, generative AI adoption, industry specific solutions, while helping them to optimize their cloud usage and manage expenses efficiently. We're collaborating with Salesforce to deploy Agentforce and Data Cloud across multiple industries, automating their teams and enhancing their ability to support their customers, tailor marketing journeys and better segment their clients.

[Diego Tártara, Global Chief Technology Officer at Globant]

As Globant's creative industry pillar, GAT advanced on large scale projects for top brands, including Progressive, Procter and Gamble, DoorDash and more, as well as new projects for Havaianas, Rimowa, among others. Thank you everyone for joining us again.

[Juan Urthiague, CFO at Globant]

Hello, everyone. I will now review our Q2 twenty twenty five financial results before providing our outlook. Our performance this quarter is very aligned with our expectations back in May. Revenue for the second quarter came in at $614,200,000 representing 4.5 year over year growth or 1% in organic constant currency and 0.5% growth sequentially. Our non IFRS adjusted operating margin was 15% for the quarter, holding steady despite some FX headwinds in LatAm currencies and demonstrating pricing and cost discipline in a tough market environment.

[Juan Urthiague, CFO at Globant]

Non IFRS adjusted diluted EPS for the quarter was $1.53 an increase from the $1.51 we reported in the 2024. Turning to the balance sheet. Our cash and cash equivalents and short term investments totaled $174,200,000 Net debt as of June 30 was $255,000,000 During this quarter, we increased our debt capacity to up to $1,100,000,000 Free cash flow for the quarter was negative $2,900,000 compared to negative $28,000,000 from the same period last year. As always, we expect to generate strong free cash flow during the second half of the year. This quarter, we executed a business optimization plan.

[Juan Urthiague, CFO at Globant]

As explained by Martin, during Q2, we launched a new go to market strategy centered around our AI industry studios and our 100 square accounts. The recently launched Globant subscription model based on AI and our proprietary Globant enterprise AI platform is getting traction with our customers. While we have delivered strong growth for many years, we have observed a more tempered demand environment over the last few quarters. The business optimization plan is part of our response to this organizational and demand changes and to best position ourselves for the next wave of growth. The primary goal of this plan is not only to protect our near term profitability, but more importantly to create the capacity to increase our investments in strategic growth areas for the rest of 2025 and beyond.

[Juan Urthiague, CFO at Globant]

This plan ensures we have the right talent and resources to execute on our AI centric strategy and capture future opportunities while managing our cost base on the current market. The main actions under this plan included a comprehensive review of our workforce to align skills and size with our strategic priorities, which resulted in a reduction of approximately 1,000 employees or 3% of our workforce during Q2, a consolidation of our global office footprint based on an analysis of our facilities and lease contracts and the strategic prioritization of our delivery centers to support future expansion. In connection with these actions, we recorded a one time charge of $47,600,000 in the second quarter. This plan should generate $80,000,000 in annualized savings. These savings will be critical in protecting our profitability in the short term, despite FX headwinds in LatAm and will also be reinvested to fuel our growth engines, specifically our AI platform development and our people.

[Juan Urthiague, CFO at Globant]

We are taking decisive action now to build a more resilient and agile organization ready to lead when the market accelerates. Now let's talk about our business going forward. Based on current visibility for the 2025, we expect revenue to be at least $615,000,000 which implies 0.1% year over year growth. This expected growth includes a positive FX impact of 50 basis points. We expect a non IFRS adjusted operating margin to be at least 15% and the IFRS effective income tax rate is expected to be in the 20% to 22% range.

[Juan Urthiague, CFO at Globant]

Non IFRS adjusted diluted EPS is expected to be at least $1.53 per share, assuming an average of 45,600,000.0 diluted shares outstanding during the third quarter. For the full year 2025, we now expect revenue to be at least 2,445,000,000 representing 1.2% year over year growth. This expected growth includes a positive FX impact of 25 basis points. For the full year, we now expect our non IFRS adjusted operating margin to be at least 15% and the IFRS effective income tax rate is expected to be in the 20% to 22% range. Our full year non IFRS adjusted diluted EPS is expected to be at least $6.12 per share, assuming 45,500,000.0 diluted shares outstanding during 2025. Thank you for your continued support.

[Arturo Langa, Investor Relations Officer at Globant]

Thank you, Juan, and hi, everyone. So as we go through the q and a section of this call, I will announce your name. At that point, please unmute your line and ask your question. Please mute your line after your question is done. I will also ask you to please, limit your time to one question and to one follow-up only.

[Arturo Langa, Investor Relations Officer at Globant]

So with that in mind, thank you very much, and we'll take the first question from the line of Tien Tsin Huang from JPMorgan. Tien Tsin, please go ahead.

[Tien-tsin Huang, Senior Analyst at JP Morgan]

Great. Thank you, Arturo. Good to see everybody. I wanted to ask just on the AI based delivery model, and I think you mentioned on the subscription side, you had 10 clients that that chose that model. I think I heard that.

[Tien-tsin Huang, Senior Analyst at JP Morgan]

Can you tell us a little bit more about that? What work is being done, and how would the work, maybe the contract terms compared to what you would normally see in a in a more traditional model? Maybe start with that if that's okay.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Hi, Tien Tsin. Thank you so much for the question. Of course. It's it's actually, it's, 18 customers.

[Tien-tsin Huang, Senior Analyst at JP Morgan]

18. Sorry.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Eighteen eighteen pay paying customers. And, yeah, look. The pipeline grew, incredibly fast, in terms of opportunities. We also, were able to to generate those 18 paying customers, under the subscription model, and that has been very, very well received by our customers. What we do is on the back of all these, customers, we're doing, AgenTik AI, generating the code, the development, the need, the the the software that our customers need.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

And we're charging that, with that subscription, in which we are, you know, taking the risk on our side of, supervising, what the the agents create. So supervision, we hope that that supervision with time will go down, and now, it's at it's at levels in which we want to be sure that we get the same quality as the traditional model that we have. So we're extremely excited with what we are seeing with our customers and, the type of contracts. Sometimes, like, the large portion of the discussion with the procurement offices and so on and so forth because it's kind of a new a new a new place where they haven't they never heard about. But I'm very happy with the results.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

I'm very happy with the pipeline, how well received was, with our customers. Kind of they are used to or they understood the model of of having a subscription and a limits on tokens. So I don't know, Ivo, maybe you can

[Diego Tártara, Global Chief Technology Officer at Globant]

No. I think, I think, Ningjing, for the most part, the more most mature aspect is actually how we deliver value, which is, how do we build software and the approach that we took. I think it was the most difficult and risky, because this is actually changing, rethinking about the way of doing it. This is not infusing AI into an existing processes. We reshuffle the whole thing to make the most out of it.

[Diego Tártara, Global Chief Technology Officer at Globant]

And, and that's actually complex because you need to convince, your client that has been working on a certain way for a long time. You need you even charge for this service in a different manner, but you bring, and and make reality what has been a promise, which is the positive impact of AI on an enterprise environment. And, like Martin said, reception was amazing. I thought, you know, getting traction out of this will would have been a little bit more, you know, complicated, etcetera, but the market and then our clients understood this perfectly well. We received the right type of questions, which is amazing.

[Diego Tártara, Global Chief Technology Officer at Globant]

So pipeline is is, is growing healthy, and, and I hate I I I I'm I'm actually convinced that this is this is a major change that will definitely prepare propel the future of Globant.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

And by the way, Dixin, the the the growth on the pipeline, a good portion of the growth of the pipeline between last quarter and this quarter is is because of this. So it's new conversations and new things are triggering up, so we're very happy.

[Tien-tsin Huang, Senior Analyst at JP Morgan]

Okay. No. Thanks for doing that. I know it's a lot of and I respect that you guys are pushing for this so hard so quickly. It's great.

[Tien-tsin Huang, Senior Analyst at JP Morgan]

So just you mentioned the pipeline, and sounds like there's a lot of AI content, overall in the AI side on the on the overall pipeline. So are you assuming a lot of conversion of the pipeline in the outlook in the second half? What what's changed there? And and do you expect some of these deals to close, for example, in the second half, or could they get pushed even further out given the the newness and Yeah. What's what's happening there?

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

We're seeing the the the conversion. I mean, the macro still is pretty uncertain, so we we decided to go on the conservative side. We're seeing, conversion in August, and conversion, like, doing very well and, much better than expected. And, so we're we're positive about that, but we want to remain, very, you know Cautious. Cautious around the idea of of, you know, the second half of the year.

[Arturo Langa, Investor Relations Officer at Globant]

Thank you so much, Tien Tsin, for your question. The next question comes from the line of Brian Bergen from TD Cohen. Brian, please go ahead.

[Bryan Bergin, Managing Director at TD Cowen]

Hey, guys. Good afternoon. Thank you. I'll ask on the optimization. Maybe can you talk about how far through those initial changes you have progressed?

[Bryan Bergin, Managing Director at TD Cowen]

We could see the 3% billable headcount reduction on a sequential basis. Should we expect any further activity kind of carry through into March as well? Or or is that now through the system?

[Juan Urthiague, CFO at Globant]

Yeah. Hi, Brian. How are you? So, on the on the headcount side, you're you're gonna see some some additional reductions happening in q three, which already happened by now. The costs have all been accounted for during the second quarter because the, you know, the plan was all provided at that point in time.

[Juan Urthiague, CFO at Globant]

The there is also additional effects that are going to happen throughout the rest of the year in terms of the office consolidation and the talent development consolidation that we're doing. But the vast majority of the plan has been already implemented, especially on the people side. You know, between what we did in q two plus, some additional adjustment in q three, that's already done.

[Bryan Bergin, Managing Director at TD Cowen]

Okay. Okay. And then my follow-up is on the creative performance. So can you give us a sense how how GUT performed here, really the creative pillar, relative to other studios? And I and I ask because there's, you know, there's incremental concerns on the street about these particular areas from from Gen AI risks, right, and, you know, the ability for enterprises to do more themselves.

[Bryan Bergin, Managing Director at TD Cowen]

So I'm I'm curious if you're seeing any trends specifically around that creative area that would, you know, support or refute that, that perspective.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Yeah. It's a it's a quite small, you know, operation, though, but, it has been growing nicely.

[Diego Tártara, Global Chief Technology Officer at Globant]

We're percent.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Yeah. Yeah. So we're very happy with that. And, I would say that that from from the the quality and the caliber of work that we do, is not the work that is that will be affected, faster by the AI. I think that, for those that are doing, like, the outsourcing of generation of images and and creation of specific campaigns for different for different channels, that impact could come faster.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Our fusion agent is targeting those kind of customers that want to automate that pipeline of creation of content. So I'm very, you know, bullish about the idea of, how our entering into that creative space will grow in the future. So what we are seeing is that between all the technology that is coming into the marketing space plus, you know, the amazing brand that we have with GUT in this space, we're creating, like, very good momentum for the future. And we are I'd say we're fully aligned with all the efficiencies that can be made in that space. So I don't see that as a as a as a threat. Even more, I see that as an opportunity.

[Juan Urthiague, CFO at Globant]

Also, Brian, when you look at, you know, how we create revenues in in that, the vast majority comes from, you know, branding company branding, company positioning. It's very high level, you know, very strategic positioning of companies. It's not that much at the, you know, you know, kind of campaign or short term campaign or advertising that you could assume that might get impacted. So we are not seeing impacts there. On the opposite, it's one of the fastest areas of growth at Globant.

[Bryan Bergin, Managing Director at TD Cowen]

Okay. Understood. Thank you.

[Juan Urthiague, CFO at Globant]

You're welcome.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Thank you.

[Bryan Bergin, Managing Director at TD Cowen]

Thanks.

[Arturo Langa, Investor Relations Officer at Globant]

Thank you, Brian. The next question comes from the line of Maggie Nolan from William Blair. Maggie, please go ahead.

[Maggie Nolan, Research Analyst - Technology, Media & Communications at William Blair & Company, L.L.C]

Hi. Thank you. I'm wondering if the enterprise AI platform is creating enhanced stickiness with your customers compared to maybe traditional more project based engagements?

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

That's a great question, Maggie. How are you? Look. I think that there's a the enterprise AI platform is like the golden path for, generative AI adoption, for for our customers. It's an enterprise class kind of integration of all the very, very complex AI ecosystem that is there to make it tangible, to make, you know, the things work.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

So you don't just marry with one LLM provider, but but you can choose which to use. And then you can integrate all the workflows, in your company, and then you can connect with all the corporate information systems, and then you can create your agents to generate those processes that companies need. So we are using enterprise AI for every single engagement on the AI bot side. We are using enterprise AI for many customers that are finding or trying to find a safe path to implement AI inside their corporations. So it's becoming, like, a key component.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

As I mentioned on on our last earnings call, it is a key component for the creation of the AI ecosystem inside corporations where you're you you don't just need to access LLMs, but you need to administer, permissions. You need to administer access. You need to control costs of the things that you do. There's a lot of things that happens, you know, on the inner work of an enterprise class implementation of AI that is bring to life or brought to life by enterprise AI. So for me, it's it's extremely essential.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

It can be mounted on top of all the, big, hyperscalers platforms. It can use many of those services, so it is very well integrated into our solutions. And I think, moving forward, it will be, a key component of everything we do. So I don't know, Leo, if you want to

[Diego Tártara, Global Chief Technology Officer at Globant]

No. Just just to add to that, Maggie, I think, low end, type of services and delivery quality have created a a great stickiness with our client, and you can see that by the low churn and maturity, especially on the top accounts, which have more than 10 with us by now. However, from a model perspective, in this specific case, you're actually you know, this, service as a software model where you actually build someone that's bespoke, but based on a platform, and you have the opportunity to operate that as well. I think it's a a great way of outsourcing functions as, as opposed to the traditional BPO. So from the software delivery perspective, you leave something with your client, which is they have the opportunity to use Genexus Enterprise AI to build durations, etcetera, and we can help them, you know, build custom made, maintain and operate solutions for them. So from the pure, model itself, I think, the the answer is clearly yes. It provides more stickiness.

[Maggie Nolan, Research Analyst - Technology, Media & Communications at William Blair & Company, L.L.C]

Thank you. That's really interesting and and kind of exciting to hear for the business model. And then one other thing I wanted to ask about the script. It sounded like there were a couple of larger deals that were close to closing. Maybe comment on those and the growth trajectory you're expecting by geography, by vertical kind of revenue growth and how the pipeline is shaping up? Thank you.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Okay. So, Maggie, just a couple of of of deals that we are seeing now. Big deal on the financial service space, which is bright in the in the in the final stages. And, also, another big deal on the on the health care and life science space, both of them, in The US, which are pretty exciting to see how the market is recovering. Also, we're seeing some deals on the enterprise side, for CPG companies in Latin America.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Also, America is recovering as as is, explained on the numbers too. So we're seeing, like, good signals, you know, across across the board. And it it looks like, you know, The US is recovering. Latin America is recovering, which was the two big, you know, things that we had on our last earnings call. I don't know, Juan, if

[Juan Urthiague, CFO at Globant]

you Yeah. Yeah. Definitely. You know, when you look at LatAm, after going down for a number of quarters, this is the first quarter it's sequentially up. So I think that's good news.

[Juan Urthiague, CFO at Globant]

It shows like a like like a stabilization, and we are seeing and we are making progress towards the end of of the for the rest of the year in LatAm. In the case of The US, you know, when we exclude some of the impact from professional services and some of the some small impact on on on technology, The rest looks okay. BFSI with a very strong performance. Travel and hospitality, very strong performance. So in general, yes, we are coming out of, you know, a number of quarters where the level of growth is lower.

[Juan Urthiague, CFO at Globant]

However, we start to see some positive numbers and some and especially on on the on the pipeline. When you look at the deals, it continues to expand. So, you know, in a way, we are just getting ready for for for that recovery whenever it comes.

[Arturo Langa, Investor Relations Officer at Globant]

Thank you very much, Maggie. The next question comes from the line of Jonathan Lee from Guggenheim. Jonathan, please go ahead.

[Jonathan Lee, MD - Equity Research at Guggenheim Partners]

Great. Thanks for taking my question. Can you help unpack some of the assumptions around the revised growth outlook and maybe the level of conservatism you're assuming? And how should we think about any potential acceleration off of your implied 4Q exit rate, if any?

[Juan Urthiague, CFO at Globant]

Yes, sure. So when you look at, you know, the guidance back in in in May and and the and the new guidance, basically, there are a number of things that happened in the quarter. You know, when we look at the second quarter, we were able to to meet or slightly exceed actually the guidance that we provided. Looking into the full year number, you know, I mean, as you remember, we had a significant reduction in the guidance for the year back in May. Now, you know, you look at the EPS for the year, it is slightly up.

[Juan Urthiague, CFO at Globant]

There's a small tweak on the revenue line, mainly coming from one professional service customer and and some small things that happen in technology. But overall, you know, just a small tweak there. At the same time, when you look at Latin America, it's not coming down anymore. Sequentially, it was up this quarter. We are seeing kind of a stabilization and and starting to build up based on the pipeline.

[Juan Urthiague, CFO at Globant]

When we look at the the the, you know, the the end of the year, I think that when when we look at the The US economy, at some point, you know, things will start to get better. We are we are not seeing further deterioration, which is good news, but things will have to get better. Companies will need to invest in the near future. You know, they cannot, you know, withhold investments for forever. So that's something that's gonna have to happen.

[Juan Urthiague, CFO at Globant]

When you look at the size of the pipeline, the pipeline it continues to build. When you look at all the changes that we did in our go to market with AI industry studios, you know, the the the the success that we are starting slowly but steadily showing progress on on the subscription model, I think those are good all all good things that are shaping up. And, you know, we expect that to start, getting traction in in in the future. So I think we are doing a lot of changes. We we we did a lot of changes on the structure.

[Juan Urthiague, CFO at Globant]

We did a lot of changes, to have the the right people with the right skills in front of customers, you know, people with the right skills given the new technologies that are coming that that now resulted in a in a significant business optimization plan. So we're doing lots of things to to, you know, make that progress that, you know, I think it's gonna happen in in the near future. We're working Yeah.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

And also also as as a generic general comment, I I think that the the amount of the opportunities are going showing up on the pipeline. But, I would say that as a general understanding of this of all the things that are happening is that the amount of new projects, as we have been saying for many for many, many, quarters, the amount of new projects, is incredible. And the complexity in any corporate environment to implement any of these agents into production with the right railways for the LLMs, with the right access permission, with the complexity of connecting with with production data, with the complexity of implementing that and then taking it to spreading it out in in a big organization. We're leaving it ourselves. We want to implement agents.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

It take us a while to generate even using the the the most sophisticated tools. Take us a while to make it happen in the whole organization because we need to connect to complex systems. And and that is creating, like, a massive set of opportunities that that before didn't exist. This is on top of all the digital transformation work. This is on top of all the enterprise migration that is happening and will keep on happening.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

So I think the opportunity for us is massive and, is reflected on on on on actual numbers, whose conversion has been has been slower. But I believe that, little by little, these corporations will come to us saying, listen. We need help to implement this. Now we need a we we have seen the first cases as you know, a year ago, I was saying, well, this is, like, very small, like, small and and proof of concepts that are happening. Now we're seeing customers say, no.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

I want, like, a full AI transformation program to change my processes because I discovered that it's not that easy to make it happen, and we need help. So that's creating, like, a massive opportunity for us, and I believe that's, you know, why I'm so bullish about the future of of our company and all the moves in which, of course, new ways of delivering the same things are needed, and we are delivering that. So, I'm extremely excited about what's coming.

[Jonathan Lee, MD - Equity Research at Guggenheim Partners]

Thanks for that color. You know, on the heels of those opportunities, can you can you talk through some of the pricing discussions you're having, particularly around, you know, potential impact of pricing from your AI pod model as well as just given the the commit the rather competitive environment that you're seeing today?

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Yeah. Jonathan, listen. The the the pricing of our AI bots, lives up to much better margin, than, what we have on a traditional project. So I think that explains by itself. I don't know if Juan or

[Juan Urthiague, CFO at Globant]

No. No. At the same time that it's, it's it has better margins. It is cost effective for the customer as well. So it's a it's a model that so far, you know, the way we are selling it, the way we are contracting with customers is a win win.

[Juan Urthiague, CFO at Globant]

So they are getting part of the productivity gains. We're getting part of the productivity gain. So it's working well. We we need to make sure, as Martin said at the beginning, that we continue to deliver the same the same quality that we have always delivered to our customers. So effect over time, you know, as as, you know, the the coding gets better, the agents get better, we should even be able to to to hopefully improve a little bit those margins.

[Juan Urthiague, CFO at Globant]

But it's it's marginally positive and on a pricing, it gives customers some efficiencies, straight away.

[Arturo Langa, Investor Relations Officer at Globant]

The next question comes from the line of Divya Goyal from Scotiabank. Divya, please go ahead.

[Juan Urthiague, CFO at Globant]

We cannot hear you, Divya. We cannot hear you. It looks like you're on mute. No.

[Arturo Langa, Investor Relations Officer at Globant]

Let's let's go to the next, question, and we'll come back to DV. I'm sorry. The next question comes from the lines of Sean Kennedy from Equitable. Sean, please go ahead.

[Sean Kennedy, Director & Senior Analyst - Payments & IT Services Equity Research at Mizuho Financial Group]

Hi, everyone. Thanks for taking my question. So I was wondering about the North American deceleration. Was that due to certain, like, planned projects ramping down and and lower conversion last few quarters? And how has the North American pipeline conversion been trending since May? Thank you.

[Juan Urthiague, CFO at Globant]

Yeah. Thank you, Sean, for the for the question. So North America was sequentially down 2%. It's very much focused on on a customer in professional services and and and some small customers in in technology. But when you look at the pipeline, when you look at some of the deals that we recently closed that Martin mentioned in health care, in BFSI, we are optimistic.

[Juan Urthiague, CFO at Globant]

I think that after several quarters of, you know, instability and changes and these tariff discussions and, you know, macro and all that, things are not great, but at least, you know, they are more stable in a way. We are we look at the pipeline. The majority of the pipeline is getting built out of The US, and and we believe that with the new go to market with AI studios industry studios, we are we're gonna be able to to take advantage of that. So we are positive on North America. Of course, Martin mentioned at the very beginning, deals take longer to close.

[Juan Urthiague, CFO at Globant]

That is something that was not common in the past. I mean, in in at least a few years ago, we we are now living with that, but we start to see some big deals getting closed, which was difficult a couple of, months and quarters ago. So bigger deals are starting to close again.

[Sean Kennedy, Director & Senior Analyst - Payments & IT Services Equity Research at Mizuho Financial Group]

Got it. And then in Latin America, it was nice to see the the sequential growth there. Could you kind of discuss some more detail about what you're seeing on, like, country by country basis?

[Juan Urthiague, CFO at Globant]

So Argentina is probably the the the best performing country is around this time in in the region. We start to see recovery in Brazil, Peru, and Mexico. And they are not all of them growing, but, you know, we are not seeing the deterioration that we saw, for example, in Brazil and Mexico earlier this year or late last year. So we see the stabilization there, some recovery in the case of Mexico and a very strong Argentina.

[Sean Kennedy, Director & Senior Analyst - Payments & IT Services Equity Research at Mizuho Financial Group]

Great. It's great to hear. Thank thanks for all the color. Appreciate it.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Thank you. Thank you.

[Arturo Langa, Investor Relations Officer at Globant]

Thank you, Sean. The next question comes from the line of Nate Svensson from Deutsche Bank. Sven Nate sorry. Please go ahead. Yeah.

[Nate Svensson, Director & Senior Equity Research Analyst - Payments, Processors, & IT Services at Deutsche Bank]

Thanks for this, guys. I wanted to follow-up on Jonathan's question on pricing. So nice to hear that the new subscription based model is gonna be accretive. But if we think about sort of revenue per head dynamics, excluding that, you know, just 18 projects so far, so relatively small portion of the base. I think last quarter revenue per head was up, you know, 2.8%.

[Nate Svensson, Director & Senior Equity Research Analyst - Payments, Processors, & IT Services at Deutsche Bank]

We have it a touch lower, maybe closer to 1% this quarter. So just wondering how you're thinking about pricing trends for the overall book of business for the remainder of the year, especially given all the dynamism and uncertainty in the macro.

[Juan Urthiague, CFO at Globant]

Yeah. So so far, you know, we have been able to either maintain or slightly grow our revenue per hit, which I think, given the market that we have seen in the last two to three year, is is quite remarkable. So we have been at maybe at the expense of sometimes growth. You know, we have been very consistent on, you know, trying to maintain our pricing, trying to maintain our margins, working hard to, you know, protect profitability, and and somehow the results have been showing that over the last two years. Pricing, yes, it's not a it's not a very hot market.

[Juan Urthiague, CFO at Globant]

So pricing is a challenge and you have to negotiate. But we, as a as a company, we believe that, you know, we need to protect profitability. We need to have deals that are are makes sense for the company. Right? We we don't wanna, you know, we always try to protect margin for since we we are public.

[Juan Urthiague, CFO at Globant]

And our margins actually, if you look at gross margins, they've been between 3841% for the last ten, fifteen, ten, twelve years as a public company. Right? So for us, we know it's easy to take prices down, but we we work very hard to to avoid those situations, and the revenue per head shows that as well.

[Nate Svensson, Director & Senior Equity Research Analyst - Payments, Processors, & IT Services at Deutsche Bank]

Yeah. It makes sense, and it's good color. And I guess related to margins, wanted to ask about utilization as well. I think last quarter on the call, you talked about improving utilization as as a potential margin lever opportunity. So I think last quarter, fell sequentially and year over year to, call it, 78%.

[Nate Svensson, Director & Senior Equity Research Analyst - Payments, Processors, & IT Services at Deutsche Bank]

Any update on what that was this quarter? And then in light of the business optimization, I guess my guess would be that utilization maybe gets a little better, but expectations for the rest of the year.

[Juan Urthiague, CFO at Globant]

Yeah. Yeah. Utilization, is up about 40 basis points this quarter, and we are we expect to take it even further up. You know, with all the with all the business optimization plan that we did, part of that creates or improves our utilization rates as well. So we always talked about 80 to 81% as a as a play as a target utilization number, and that's still valid, and we are working towards that.

[Juan Urthiague, CFO at Globant]

We also mentioned in the past that, you know, in a very hot market, it's always easier to drive utilization up. But, I mean, we are making progress. And this quarter, we are we were able to increase that by about thirty forty basis points.

[Nate Svensson, Director & Senior Equity Research Analyst - Payments, Processors, & IT Services at Deutsche Bank]

Thanks for the color.

[Juan Urthiague, CFO at Globant]

Thank you.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Thank you.

[Arturo Langa, Investor Relations Officer at Globant]

Thank you, Nate. The next question comes from the line of Leonardo Olmos from UBS. Leonardo, please go ahead.

[Leonardo Olmos, Deputy Head - Brazil Research at UBS Group]

Hi, everyone. Thank you for taking the question. Good evening. Can you talk a little bit about, the potential or not concentration of, consultancy firms or IT services among clients? I mean, are clients talking to newer firms or are they just concentrating the biggest one?

[Leonardo Olmos, Deputy Head - Brazil Research at UBS Group]

Because I thought and please correct me if I'm wrong that you may be not growing that much with clients with revenue around on top of $1,000,000 If that's the case, please correct me. But all in, I want to know how competition is and how prices are and if clients are concentrating with lower lower number of IT services companies. Thank you.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Yeah. We we have been running a lot of these consolidation processes, and, the good news is that we have been selecting in all of them. And I think that or in pretty much all of them. So that that's one thing. The second thing is we have more, accounts yielding, more than a million dollars than a year ago.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

So that speaks by itself, in the in the to your question. And and and the other thing is, yeah, companies are looking for for a differential, for a differential offering. They are tired about the traditional, you know, big consult massive consulting firms that do not innovate or or that they are not bringing anything new to the table. And one of the reasons why we're being able to maintain our, you know, position and leadership is that we are offering something new, and we are telling to the market, listen. The model will change, and we are changing faster than that.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

So, I'm extremely excited about that. And I think that that the future will keep on showing that, smaller companies like Globant, right, has a much higher impact on how corporations transform themselves to become the next versions of themselves. So, I I I'm very bullish on that, but please, my my teammates here.

[Diego Tártara, Global Chief Technology Officer at Globant]

Most of our top clients have done that, and those were actually opportunities for us because we ended up you know, in the vast majority, we ended up selected. I think that at this particular moment, what is it's interesting is that, you know, procurement, instead of, coming up with consolidation, etcetera, because of a requirement of the business, it on the contrary, opens up. And what this means is it opens the possibility to bring boutique type of companies. Why is that? They're smaller.

[Diego Tártara, Global Chief Technology Officer at Globant]

They react fast, to changes in the technological landscape. So, typically, when these major changes happen, you see the opposite. As opposed to consolidation, you know, open it up and soften, the vendor selection. What's good about this is that we've been running alongside those companies, and we've been getting those types of those type of opportunities. In most of our clients, we're, you know, either leading AI or, executing, our client strategy.

[Diego Tártara, Global Chief Technology Officer at Globant]

Many of our clients, you know, have either selected a chief AI officer or their chief data officer has put together a strategy, and they said, you know, Globant, now I need your help to scale that, this. So and I think that's the most important aspect that I would like to quote. It's not the other process has been running over and over for for for a long time. But when this happens, you set apart companies that innovate fast that take bold decisions from the ones that take longer.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Yeah. Also, we're focused on a 100 square program. Right? I mean, we're paying a lot of attention to those accounts that can multiply for us, that can that has a potential of of of having a larger need of making these massive transformations. And, I think that that, that approach, is extremely important for our future, and we'll keep on paying a lot of attention and our best people into those accounts.

[Leonardo Olmos, Deputy Head - Brazil Research at UBS Group]

Crystal clear. Thank you very much, Martin and Diego.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Sure. Thank you.

[Arturo Langa, Investor Relations Officer at Globant]

Thank you very much, Leo. So that will be all for the q and a section of today. Thank you all. And with that, I will turn it over to you.

[Juan Urthiague, CFO at Globant]

Do wanna try Divya? Let's try.

[Diego Tártara, Global Chief Technology Officer at Globant]

Do you wanna try Divya?

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Divya, if it works?

[Divya Goyal, Director - Equity Research - Technology, Software & Services at Scotiabank]

Hi. Can you hear can you can you all hear me?

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

I hear you, Divya.

[Divya Goyal, Director - Equity Research - Technology, Software & Services at Scotiabank]

Thanks for bringing me back. I really appreciate it here. I just wanted to get a little bit more color. I know you've provided a lot of information on the AI pods, but could you help us understand what's the scale and scope of some of the engagements you're seeing? And are you seeing some of these engagements expand into existing clients, or are you also seeing some net new clients adopting and getting interested in this AI pods methodology or a solution offering that you have?

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Vivia, listen. The pipeline contains, like, you know, a lot of new customers, and I would say more than half is current customers. The conversion itself has been on current customers and the new customers and and some new customers. But I would say that the vast majority of what we close today are current customers plus two or three new. So, so but it's very interesting to see the dynamics inside the pipeline.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Because inside the pipeline, you have a lot of customers transforming deals and making deals like like they used to be, like, traditional deals, but now moving into this new subscription model. And then we have a lot of new customers that we didn't have before. So so, we announced it. It was quite low profile. We just, sent email to some of our but I received, for example, an email from from a hyperscaler saying, hey, Martin.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Look. We understand this quite well. We we like, we like what you're doing, and and we would love to know more about it. And that that happens yesterday. So so what I'm saying is is creating momentum at Bain Capital.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Sorry. Not Bain Capital. Bain Consulting, put out a report, to talk about the new model. Like, it was a very interesting report talking about how this new model should be the the the next choice model, and, we're very excited. But I don't know.

[Juan Urthiague, CFO at Globant]

I think you covered it all. I'm sorry.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

You covered it all.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

So okay. So so that's the that's the the answer. Short answer. You have one more.

[Divya Goyal, Director - Equity Research - Technology, Software & Services at Scotiabank]

It's it's it's great. It's very exciting. I can tell you as an, as an outcome space pricing models pick up across the sector, you're definitely leading the trend is what I would say. One more question that I wanted to understand. Like, I know some of your peers have been talking about helping global enterprises set up global capability centers, so GCCs.

[Divya Goyal, Director - Equity Research - Technology, Software & Services at Scotiabank]

Is that something Globant has been participating in, helping the global enterprises grow their offshoring unit, and what is the role, if at all, that you play in there? That's all for me.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Yes. The answer is yes. We are participating in many of those deals. One of the deals that we were just, you know, about to close or or is closed already, is about taking over one of these centers. Our proposal, as opposed to the traditional proposal, is a proposal that includes our AI bots, and it's something that we're pretty proud because we won because of that.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

And, I think that is something that, I mean, this this new strategy, this new AI bots model comes with two things. First, it makes savings tangible. And second, it provides a level of transparency of what we do that is unparalleled to any other model in the past. So we can give you a report of every single token that we use and how we use it and which is the artifacts that has been created using those tokens and how we supervise that and how we make sure that all those things make sense. So so in essence, I believe that it's, a breakthrough on the on the offering.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

It's something that we're extremely excited. But, yes, we're participating in all these deals, and, hopefully, we will win them all.

[Divya Goyal, Director - Equity Research - Technology, Software & Services at Scotiabank]

You're the best. Thank you so much.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Thank you very much.

[Arturo Langa, Investor Relations Officer at Globant]

Thank you, Divya, and I apologize for that. Thank you. So with that, we conclude the q and a section for today. Thank you all, And now I will turn it over to Martin for some closing remarks. Please go ahead, Martin.

[Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors at Globant]

Thank you, Arturo, and thank you everyone for participating, for your continued support, and looking forward to see you on our next, earnings call. Ciao. Bye bye.

Participants

Executives

• Arturo Langa, Investor Relations Officer
• Martín Migoya, Co-Founder, CEO & Chairman of the Board of Directors
• Diego Tártara, Global Chief Technology Officer
• Juan Urthiague, CFO

Analysts

• Tien-tsin Huang, Senior Analyst at JP Morgan
• Bryan Bergin, Managing Director at TD Cowen
• Maggie Nolan, Research Analyst - Technology, Media & Communications at William Blair & Company, L.L.C
• Jonathan Lee, MD - Equity Research at Guggenheim Partners
• Sean Kennedy, Director & Senior Analyst - Payments & IT Services Equity Research at Mizuho Financial Group
• Nate Svensson, Director & Senior Equity Research Analyst - Payments, Processors, & IT Services at Deutsche Bank
• Leonardo Olmos, Deputy Head - Brazil Research at UBS Group
• Divya Goyal, Director - Equity Research - Technology, Software & Services at Scotiabank