Less than 3 years after its arrival to the region, Globant confirms its bet for Middle East, with its first regional HQ and an ambitious expansion plan The global digital transformation company, already partnering with the most significant Giga-projects in the region, expects this hub in the heart of a growing Saudi Arabia to serve as a platform to export talent and best practices worldwide Globant will train local IT talent in the latest AI skills so that they can orchestrate agentic workflows for key in ...

Financial Performance - Globant reported first-quarter earnings of $1.50 per share, missing the analyst consensus estimate of $1.58 per share [1] - Quarterly sales were $611.09 million, which also fell short of the analyst consensus estimate of $621.38 million [1] - The company issued second-quarter guidance below estimates and cut its FY25 guidance [1] Strategic Focus - The company emphasizes a strong focus on AI-related opportunities and assisting clients in transforming their businesses [2] - Globant's growth strategy integrates a client-centric vision with industry-specialized AI Studios and a subscription model [2] - The CEO highlighted the company's commitment to leading technological transformation through its AI Pods and the Globant Enterprise AI platform [2] Market Reaction - Following the earnings announcement, Globant shares gained 3.1%, trading at $104.67 [3] - Analysts adjusted their price targets for Globant after the earnings report, with Goldman Sachs lowering its target from $225 to $120 [8] - Mizuho maintained an Outperform rating but reduced its price target from $194 to $153 [8]

Core Viewpoint - Globant (GLOB) reported mixed financial results for Q1 2025, with earnings per share (EPS) of $1.50, missing estimates, and revenues of $611.1 million, also below expectations, despite a year-over-year revenue growth of 7% driven by AI-related opportunities and business momentum [1][2][3]. Financial Performance - Non-GAAP EPS for Q1 2025 was $1.50, compared to $1.53 in the prior-year quarter, missing the Zacks Consensus Estimate of $1.58 [1]. - Total revenues for the quarter were $611.1 million, falling short of the Zacks Consensus Estimate of $622 million, but reflecting a 7% increase year-over-year [2]. - Adjusted net income for the period was $67.8 million, remaining flat year-over-year [10]. Segment Performance - Media and Entertainment revenues increased by 0.3% year-over-year to $120 million [6]. - Technology & Telecommunications revenues decreased by 7.1% year-over-year to $57.8 million [6]. - Travel & Hospitality revenues surged by 24% year-over-year to $77.8 million [6]. - Consumer, Retail & Manufacturing revenues grew by 3.5% year-over-year to $113 million [6]. - Banks, Financial Services and Insurance revenues rose by 23.1% year-over-year to $126.2 million [7]. - Healthcare revenues declined by 1.2% year-over-year to $42.6 million [7]. Customer Base and Revenue Distribution - As of March 31, 2025, Globant served 1,004 customers, with 346 clients generating over $1 million in annual revenues, up from 318 the previous year [5]. - Revenue distribution showed North America contributing 55.5%, Latin America 19.6%, Europe 18.2%, and New Markets 6.7% [8]. Guidance and Future Outlook - For Q2 2025, revenues are expected to be at least $612 million, indicating a 4.2% year-over-year growth [12]. - Full-year 2025 revenue guidance is set at $2,464 million, reflecting a 2% year-over-year growth [12]. - The company anticipates a non-IFRS adjusted profit from operations margin of 15% for both Q2 and the full year [12]. Market Reaction - Following the mixed performance, GLOB's shares fell by 30.1% in pre-market trading on May 16, 2025, and have decreased by 20.8% over the past year compared to the industry growth of 32.7% [4].

Group 1: Market Overview - U.S. stock futures were higher, with Dow futures gaining around 100 points on Friday [1] Group 2: Globant S.A. Performance - Globant reported quarterly earnings of $1.50 per share, missing the analyst consensus estimate of $1.58 per share [2] - The company reported quarterly sales of $611.09 million, which also missed the analyst consensus estimate of $621.38 million [2] - Globant shares dipped 26.2% to $98.00 in pre-market trading following the disappointing results and lowered guidance [2] Group 3: Other Companies' Performance - Doximity, Inc. shares dipped 22.1% to $45.52 after issuing FY26 sales guidance below estimates [4] - Travere Therapeutics, Inc. declined 15.2% to $17.94 after the FDA accepted its supplemental New Drug Application for FILSPARI [4] - Arrive AI Inc. fell 13.2% to $11.50 after a significant drop of 67% on Thursday [4] - BRF S.A. dropped 11.1% to $3.19 after gaining 3% on Thursday [4] - Lithium Americas Corp. dipped 10.8% to $2.82 after filing for a mixed shelf of up to $1.0 billion [4] - KULR Technology Group, Inc. fell 10.1% to $1.33 after missing EPS and revenue estimates [4] - Applied Materials, Inc. fell 5.8% to $164.65 despite reporting better-than-expected earnings for its second quarter [4] - Take-Two Interactive Software, Inc. fell 3.7% to $223.68, reporting fourth-quarter net bookings of $1.58 billion, up 17% year-over-year [4]

to delight Technology that dares F1Q25 INVESTOR PRESENTATION INVESTMENT HIGHLIGHTS Pure play in the digital and cognitive space Global presence, leveraging next-gen software and the right talent and skills Organized into Studios, delivering domain expertise in emerging technologies and industries Strong set of Accelerators that leverage AI and other technologies to reinvent key aspects of organizations Proven ability to acquire and integrate complementary, bolt-on acquisitions Experienced and founder-led ma ...

Company Performance - Globant reported quarterly earnings of $1.50 per share, missing the Zacks Consensus Estimate of $1.58 per share, and showing a decrease from $1.53 per share a year ago, resulting in an earnings surprise of -5.06% [1] - The company posted revenues of $611.09 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.83%, compared to $571.08 million in the same quarter last year [2] - Over the last four quarters, Globant has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Outlook - Globant shares have declined approximately 37.7% since the beginning of the year, contrasting with the S&P 500's gain of 0.2% [3] - The current consensus EPS estimate for the upcoming quarter is $1.66 on revenues of $639.83 million, and for the current fiscal year, it is $6.80 on revenues of $2.61 billion [7] - The estimate revisions trend for Globant is currently unfavorable, resulting in a Zacks Rank 5 (Strong Sell), indicating expected underperformance in the near future [6] Industry Context - The Internet - Software and Services industry, to which Globant belongs, is currently ranked in the bottom 18% of over 250 Zacks industries, suggesting a challenging environment [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment and stock performance [5]

Financial Data and Key Metrics Changes - Revenues reached $611.1 million, representing a 7% year-over-year increase and 8.6% in constant currency, slightly below initial guidance [6][22] - Adjusted gross margin for the quarter stood at 38%, flat year-over-year, while adjusted operating margin was 14.8%, falling short of expectations due to lower revenues [24][25] - Adjusted net income for Q1 was $67.8 million, translating into an adjusted diluted EPS of $1.50, almost flat year-over-year [25][26] - Cash and cash equivalents and short-term investments were $120.2 million, with net debt at $167 million, indicating a low net debt ratio and substantial financial flexibility [25][26] Business Line Data and Key Metrics Changes - North America saw a 6% year-over-year revenue increase, Europe grew by 13.4%, and new markets experienced an 84.4% year-over-year growth, while Latin America declined by nearly 9% [22][23] - Revenue per IT head increased by 2.8% year-over-year, reflecting the value and efficiency delivered [24] Market Data and Key Metrics Changes - The macroeconomic environment has been challenging, with a significant rise in the probability of a recession in the U.S. and softening consumer spending impacting customer decisions [8][22] - Pipeline conversion has slowed, particularly in the U.S., while growth in some Latin American countries has been lower than expected [8][9] Company Strategy and Development Direction - The company is focusing on three core pillars: deepening relationships with strategic clients, expanding AI studios for comprehensive AI transformation, and implementing a subscription model for service delivery [10][12][14] - The subscription model aims to provide a flexible, consumption-based framework for clients, aligning incentives around outcomes rather than hours worked [12][14] - The company is committed to long-term value creation and transformative impact, despite current macroeconomic challenges [9][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength and resilience of the business, noting a robust pipeline with a 20% increase year-over-year [9][34] - The company anticipates a recovery in Latin America, with improvements noted in Argentina and Chile, although Mexico and Brazil remain challenging [36][116] - Revised revenue guidance for Q2 is at least $612 million, reflecting a cautious outlook amid macroeconomic uncertainties [26][39] Other Important Information - The company introduced Globant Coda, an AI-driven suite aimed at simplifying and accelerating the software development lifecycle [15] - Recent partnerships include a reinvention partnership with the Saudi Pro League and a collaboration with Formula One to enhance competitive experiences [17][18] Q&A Session Summary Question: Recovery of demand in Latin America - Management noted that many deals are being delayed rather than canceled, with a robust pipeline indicating potential recovery [34][36] Question: Backlog of signed contracts - The company indicated a high level of visibility and comfort regarding the backlog relative to revenue guidance, though uncertainty remains for the second half of the year [50][51] Question: Performance of top clients - Most top clients performed similarly, with stabilization expected in Q2, although those with consumer-facing exposure faced more challenges [62][64] Question: Competitive position in application development - The company maintains a balanced approach across application development, cloud, and creative services, positioning itself well in a complex market [75][76] Question: Margins in Latin America - Margins are not significantly different across regions, with a focus on maintaining healthy relationships and pricing strategies [88][90] Question: Traction of new commercial models - AI revenue is growing significantly, with the new subscription model generating early interest, although it is not yet a substantial percentage of total revenue [94][96]

Financial Data and Key Metrics Changes - Revenues reached $611.1 million, representing a 7% year-over-year increase and 8.6% in constant currency, slightly below February guidance [21][5][24] - Adjusted gross margin for the quarter stood at 38%, flat year-over-year, while adjusted operating margin was 14.8% [23][24] - Adjusted net income for Q1 2025 was $67.8 million, translating into an adjusted diluted EPS of $1.50, almost flat year-over-year [24] - Cash and cash equivalents and short-term investments were $120.2 million, with net debt at $167 million, indicating a low net debt ratio [24][25] Business Line Data and Key Metrics Changes - North America saw a 6% year-over-year revenue increase, Europe grew by 13.4%, and new markets experienced an 84.4% year-over-year growth [22] - Latin America faced a decline of nearly 9% year-over-year, with notable contractions in Mexico and Brazil, partially offset by strong growth in Argentina [22][21] Market Data and Key Metrics Changes - The macroeconomic environment has been challenging, with a significant rise in the probability of a U.S. recession and softening consumer spending [7][6] - The pipeline remains robust with a 20% increase over last year, despite near-term challenges [8][21] Company Strategy and Development Direction - The company is focusing on three core pillars: expanding its 100 square accounts, enhancing AI studios for comprehensive AI transformation, and implementing a subscription model for service delivery [9][10][12] - The subscription model aims to provide a consumption-based framework for clients, aligning incentives around outcomes rather than hours worked [12][14] - The company is committed to long-term value creation and transformative impact, particularly in AI and digital transformation [6][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current challenging macroeconomic environment but remains confident in the strength and resilience of the business [5][6] - The company has revised its full-year revenue guidance to at least $2.004 billion, representing 2% year-over-year growth [25] - Management expects a solid second quarter with guidance of at least $612 million in revenues, reflecting a cautious but optimistic outlook [25][26] Other Important Information - The company has introduced Globant Coda, an AI-driven suite aimed at simplifying the software development lifecycle [15] - Recent partnerships include a reinvention partnership with the Saudi Pro League and a major milestone with Formula One [16][17] Q&A Session Summary Question: Recovery of demand in Latin America - Management indicated that many deals are being delayed rather than canceled, with a 20% increase in the pipeline providing optimism for recovery [33][34][36] Question: Protecting margins amid potential deterioration - Management confirmed that measures are in place to protect margins and profitability, with a focus on disciplined pricing and cash flow management [42][43] Question: Backlog and revenue guidance - Management stated that visibility is high for the second quarter, with a focus on maintaining a derisked revenue forecast [50][51] Question: Performance of top clients - Management noted stabilization in performance among top clients, with new markets continuing to outperform [62] Question: Capital positioning and cash flow generation - Management emphasized a focus on protecting cash flow and reducing capital expenditures while prioritizing AI investments [118][119]

Core Insights - Globant reported Q1 2025 revenues of $611.1 million, reflecting a 7% year-over-year growth despite a challenging macroeconomic environment [5][8][7] - The company emphasizes its focus on AI-related opportunities and a comprehensive growth strategy that integrates client-centric vision with industry-specialized AI Studios [4][5] - Adjusted diluted EPS for Q1 2025 was $1.50, slightly down from $1.53 in Q1 2024, while IFRS diluted EPS was $0.68 compared to $1.02 in the same period last year [7][8] Financial Performance - Revenues for Q1 2025 were $611.1 million, a 7.0% increase from $571.1 million in Q1 2024 [5][8] - IFRS Gross Profit Margin was 34.9%, down from 35.4% in Q1 2024, while Non-IFRS Adjusted Gross Profit Margin remained stable at 38.0% [8] - Profit from Operations Margin under IFRS was 8.2%, compared to 8.4% in Q1 2024, and Non-IFRS Adjusted Profit from Operations Margin was 14.8%, down from 15.0% [8] Customer and Market Insights - The geographic revenue breakdown for Q1 2025 showed 55.5% from North America, 19.6% from Latin America, 18.2% from Europe, and 6.7% from New Markets [8][25] - Globant served a total of 1,004 customers in the last twelve months, with 341 accounts generating over $1 million in annual revenues, an increase from 318 in the previous year [8][25] - 67.2% of revenues for Q1 2025 were denominated in US dollars, indicating a strong reliance on the US market [8][25] Future Outlook - For Q2 2025, revenues are estimated to be at least $612.0 million, representing a 4.2% year-over-year growth [13] - The fiscal year 2025 revenue forecast is at least $2,464.0 million, implying a minimum of 2.0% year-over-year growth [13] - Non-IFRS Adjusted Diluted EPS for Q2 2025 is estimated to be at least $1.52, with a projected average of 45.7 million diluted shares outstanding [13]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Globant, with a focus on how actual results compare to estimates, which could significantly impact the stock price [1][2]. Earnings Expectations - Globant is expected to report quarterly earnings of $1.58 per share, reflecting a year-over-year increase of 3.3% [3]. - Revenue is projected to be $622.45 million, representing a 9% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 2.87% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10]. - The current Earnings ESP for Globant is -1.71%, suggesting a likelihood of missing the consensus EPS estimate [11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the deviation of actual earnings from consensus estimates, with positive readings being more reliable [6][7]. - Stocks with a positive Earnings ESP and a strong Zacks Rank (1-3) have historically shown a nearly 70% chance of delivering a positive surprise [8]. Historical Performance - In the last reported quarter, Globant exceeded the expected earnings of $1.74 per share by posting $1.75, resulting in a surprise of 0.57% [12]. - Over the past four quarters, Globant has beaten consensus EPS estimates twice [13]. Conclusion - Globant does not currently appear to be a strong candidate for an earnings beat, and investors should consider other factors when making decisions regarding the stock ahead of the earnings release [16].