Employee Attrition and Talent Management - The total attrition rate among the company's employees was 9.5%, 8.1%, and 16.7% for the years ended December 31, 2024, 2023, and 2022, respectively[40]. - The company faces intense competition for skilled technology professionals, which may lead to a shortage of qualified personnel[41]. - The company’s future growth depends on recruiting and retaining technology professionals and expanding its international operations[45]. - As of December 31, 2024, 12.2% of employees are covered by Collective Bargaining Agreements, which could lead to increased labor costs and operational disruptions[66]. - The company emphasizes attracting and retaining top talent by decentralizing delivery centers and collaborating with universities globally[184]. - The company has a talent pool of over 5 million graduates annually from India and nearly 2 million tech professionals in Latin America, with a focus on digitalization and workforce development[222]. Revenue and Client Dependency - Revenues from fixed-price contracts represented 25.1%, 18.3%, and 15.4% of total revenues for the years ended December 31, 2024, 2023, and 2022, respectively[49]. - The company's largest client, The Walt Disney Company, accounted for 8.7% of revenues in 2024, down from 10.7% in 2022, indicating a potential risk in client dependency[58]. - The top ten clients contributed 29.3% of total revenues in 2024, a decrease from 35.6% in 2022, highlighting increasing revenue concentration risk[58]. - Approximately 58.7% of total revenues in 2024 were generated from clients in the media and entertainment, consumer, retail, manufacturing, and financial services industries, indicating reliance on specific sectors[74]. - 93.7% of the company's revenues for the year ended December 31, 2024, came from existing clients who engaged its services in the prior year[172]. Market Conditions and Economic Risks - The company has experienced rapid revenue growth in the past, but future growth may not be replicable due to global macroeconomic conditions[43]. - The company is subject to risks associated with evolving market conditions and geopolitical factors that could impact its business[37]. - The technology services industry is rapidly changing, making it difficult to predict future performance and increasing investment risk[76]. - The technology services industry is sensitive to economic downturns, with potential demand for services significantly depressed during economic slowdowns, impacting revenues and profitability[104]. - The company operates in over 32 countries, facing risks from economic and geopolitical conditions that could adversely affect its financial condition and results of operations[103]. Competition and Pricing Pressures - The company faces intense competition from larger firms with greater resources, which may lead to pricing pressures and loss of market share[62][63]. - The pricing structures for client contracts are highly dependent on accurate forecasts of costs, which may not always be achievable[48]. - The company’s reliance on short-term contracts with clients may lead to revenue volatility and increased pricing leverage for clients during negotiations[60]. Innovation and Product Development - Significant investments have been made in developing AI-enabled products, but demand for these products may not materialize[56]. - The company must continue to innovate and invest in research and development to remain competitive in the technology services industry[55]. - The cloud IT services market is projected to reach $439 billion by 2028, with the need for external public cloud IT transformation services expected to rise from 60% in 2023 to approximately 80% by 2028[174]. - The market for AI services is projected to reach $609 billion by 2028, with a CAGR of 21.4%[177]. - The company has launched Globant Ventures to promote new entrepreneurs focused on AI, Blockchain, and Future of Work technologies[220]. Financial and Operational Risks - If the company cannot maintain appropriate resource utilization rates, profit margins and revenues may be adversely affected[34]. - The company may require additional capital for future investments or acquisitions, which could lead to dilution of existing shareholders[100]. - The ability to obtain additional capital is subject to uncertainties that could limit business growth and service development[101]. - The company’s cash flows may be adversely affected if it is unable to collect on billed and unbilled receivables from clients[95]. - The company may face immigration or work permit restrictions that could adversely affect its ability to expand its delivery footprint and deploy personnel onsite[129]. Compliance and Regulatory Challenges - The evolving regulatory environment surrounding AI technology may increase compliance costs and impact the company's ability to produce and export products[57]. - Compliance with complex international laws and regulations increases operational costs and poses significant risks to business continuity[122]. - Failure to meet ESG regulations and stakeholder expectations could harm the company's reputation and financial condition[68][73]. - The company may face increased compliance costs and resource strain due to evolving corporate governance and public disclosure requirements[133]. Sustainability and Corporate Responsibility - The company achieved carbon neutrality in 2021 and actively supports carbon-offsetting projects to enhance environmental well-being[213]. - The company has set Science-Based Targets to minimize its carbon footprint and is committed to reducing emissions in alignment with the United Nations Race to Zero Initiative[210]. - The Be Kind initiative focuses on sustainability and community impact, aligning with the United Nations Sustainable Development Goals[202]. - The company has partnered with the Green Software Foundation to establish best practices for sustainable software development, furthering its commitment to reducing carbon footprints[213]. Strategic Acquisitions and Partnerships - Strategic acquisitions are a key part of the company's competitive strategy, with several completed in 2022, 2023, and 2024, but integration risks remain[97]. - The company acquired Exusia, an AI-first digital transformation company, and Blankfactor, a U.S.-headquartered IT services consulting firm, in 2024[162]. - The company has expanded its North American footprint and enhanced its healthcare solutions services by acquiring ExperienceIT, a U.S.-based consultancy with deep healthcare expertise[160]. - The company has established a multi-year partnership with FIFA to expand its FIFA+ content app and sponsor global top football competitions[156]. Shareholder and Market Considerations - The market price of the company's common shares may be highly volatile, influenced by factors beyond its control, including economic conditions and fluctuations in capital markets[130]. - The company has not declared dividends in the past and does not anticipate paying any dividends in the foreseeable future, subject to Luxembourg law[138]. - The ability to declare dividends is contingent on the availability of distributable earnings or reserves, and any future dividends may not be paid more frequently than annually[139]. - Shareholders may experience dilution of their shareholding due to the company's ability to suppress or limit pre-emptive subscription rights on future common share issuances[144].

Group 1 - Globant's stock has dropped over 30% shortly after the earnings announcement on February 20 [1] - The decline is attributed to a mixed quarterly performance and lower-than-expected guidance for 2025 [1] - Negative market sentiment has contributed to the stock's significant decrease [1]

Core Insights - The article discusses potential investment opportunities in GLOB, indicating a possible long position in the stock within the next 72 hours [1]. Group 1 - The analyst has no current stock or derivative positions in the companies mentioned but may initiate a beneficial long position soon [1]. - The article expresses the author's personal opinions and is not influenced by any compensation from companies mentioned [1]. - There is no business relationship with any of the companies whose stock is discussed in the article [1].

Core Insights - Globant (GLOB) reported fourth-quarter 2024 non-GAAP EPS of $1.75, exceeding the Zacks Consensus Estimate of $1.74, and up from $1.62 in the prior-year quarter [1] - Revenues for the quarter were $642.5 million, slightly below the Zacks Consensus Estimate of $644.8 million, but represented a 10.6% year-over-year increase driven by AI-driven services and expanding client engagements [2] Financial Performance - For the year ended December 31, 2024, GLOB served 1,012 customers, with 20 generating over $20 million in annual revenues and 346 clients contributing more than $1 million, marking an 11.2% increase year-over-year [3] - AI-based projects generated $350 million in annual revenues, reflecting a 110% year-over-year growth [3] - Adjusted net income for the period was $78.7 million, up 10.7% year-over-year [9] Segment Performance - Media and Entertainment revenues (20.6% of net sales) increased by 9.7% year-over-year to $132.3 million, largely due to growth from the Walt Disney Company [4] - Travel & Hospitality revenues surged 35.3% year-over-year to $83.3 million, while Professional Services revenues decreased by 8.8% to $60.7 million [5] Regional Performance - North America accounted for 55.2% of revenues, with Latin America contributing 20.4% and Europe 17.7% [6] - New markets in the Middle East and APAC saw a remarkable 89% year-over-year revenue increase [7] Margins and Cash Flow - Non-IFRS adjusted gross margin was 38.3%, slightly up from 38% a year ago, while adjusted profit from operations margin improved to 15.7% from 15.3% [8] - As of December 31, 2024, cash and short-term investments totaled $156.1 million, down from $213.5 million as of September 30, 2024 [10] Outlook - For 2025, GLOB estimates revenues between $2,635 million and $2,705 million, indicating a year-over-year growth of 9.1% to 12.0% [11] - The company anticipates first-quarter revenues between $618 million and $628 million, representing 8.2% to 10% year-over-year growth [12]

Financial Data and Key Metrics Changes - Annual revenue reached $2.4157 billion, up 15.3% year-over-year, with Q4 revenue at $642.5 million, representing a 10.6% increase year-over-year and 4.5% quarter-over-quarter [22][51][23] - Adjusted diluted EPS grew 11.5% year-over-year to $6.40, with adjusted net income of $285.4 million and a net profit margin of 11.8% [55][54] - Adjusted operating margin improved to 15.4%, up 20 basis points from the previous year, while adjusted gross profit margin was 38.2%, up 10 basis points [54][55] Business Line Data and Key Metrics Changes - AI-related projects contributed over $350 million to revenue, up 110% from 2023, indicating significant growth in this segment [18] - The Globant GUT Network, focused on creative marketing, now represents close to 10% of total revenue and is showing strong year-over-year growth [21] Market Data and Key Metrics Changes - Revenue from the largest client, Walt Disney Company, increased by 23.7% year-over-year [40] - New markets region, including the Middle East and Asia Pacific, saw revenue growth of 43.8% quarter-over-quarter and 89% year-over-year [40] - North America accounted for 55.2% of total revenue, followed by Latin America at 20.4%, Europe at 17.7%, and new markets at 6.7% [42] Company Strategy and Development Direction - The company is focusing on embedding AI deeply within industries through its AI studios, which are central to its reinvention strategy [15][16] - Globant aims to leverage its strong brand and technology to create products that are not only functional but also emotionally resonant [19][20] - The company is reinforcing its go-to-market strategy globally to maximize the potential of its AI studios [41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment in the U.S. and Europe, while noting a more stable situation in Latin America [68][69] - The pipeline is strong, with AI-related work growing rapidly, although conversion has slowed recently [70][72] - The company anticipates a more muted start to 2025 due to lower billable days and political uncertainties in Latin America [58][59] Other Important Information - The company launched an AI Learning Hub to equip teams with the latest AI proficiency [48] - Globant achieved its goal of providing 15,000 coding scholarships by 2025 one year ahead of schedule [49] Q&A Session Summary Question: Demand environment on a regional basis - Management noted strong demand in the U.S. and a positive outlook in Europe, while Latin America is stabilizing after a rocky 2024 [68][69] Question: Ramp timing for new clients in the Middle East - Management indicated that technology rollout for new projects in the Middle East is ongoing, with stronger growth expected in 2025 [75] Question: Pricing trends and wage increases - Pricing remains challenging, with expected neutral to low single-digit price increases due to competition [78] Question: Organic growth drivers for 2025 - Organic constant currency growth is estimated at 9.5%, driven by new markets and AI studio solutions [82][84] Question: Benefits of automation and headcount versus revenue - Management highlighted that AI tools are enhancing productivity and shifting the focus from headcount to performance-based metrics [88][90] Question: Visibility in full-year outlook - Visibility is similar to the previous year, with a larger pipeline but slower conversion rates [97] Question: Headwinds from Disney and Latin America - Disney's performance exceeded expectations, while political noise in Latin America remains a concern [104][106] Question: Underperformance of top five customers - Underperformance is linked to specific industries, particularly professional services, while overall growth in larger accounts remains strong [110][112]

Core Insights - Globant's fourth-quarter earnings slightly exceeded analysts' expectations, with a non-IFRS adjusted diluted EPS of $1.75 compared to the forecast of $1.74, while revenue fell short at $642.5 million against the expected $644 million [1][5]. Financial Performance - Non-IFRS adjusted diluted EPS rose by 8.0% year-over-year from $1.62 to $1.75 [2]. - Revenue increased by 10.6% year-over-year from $580.7 million to $642.5 million, although it was near the lower end of management's guidance [2][5]. - Non-IFRS adjusted gross profit margin improved from 38.0% to 38.3% year-over-year [2][5]. - Non-IFRS adjusted profit from operations margin increased from 15.3% to 15.7% year-over-year [2][5]. Business Overview - Globant specializes in digital and cognitive transformations, offering services such as cloud transformation and AI innovation across various industries, including fintech and healthcare [3]. - The company is diversifying its service offerings to mitigate market-specific risks and has expanded into new markets, including blockchain technology [3]. Strategic Focus - The company's future growth relies on maintaining a diverse portfolio and continuous innovation, particularly in AI and cloud services [4]. - Management anticipates revenue growth for 2025 between $2.635 billion and $2.705 billion, reflecting a growth outlook of 9.1% to 12% [7]. Market Challenges - Approximately 64.8% of Globant's revenue is in U.S. dollars, making it susceptible to foreign exchange rate fluctuations, which have pressured profits [6]. - Increased competition in the tech sector necessitates ongoing investments in research and development to stay competitive [6].

Company Performance - Globant reported quarterly earnings of $1.75 per share, exceeding the Zacks Consensus Estimate of $1.74 per share, and up from $1.62 per share a year ago, representing an earnings surprise of 0.57% [1] - The company posted revenues of $642.48 million for the quarter ended December 2024, which missed the Zacks Consensus Estimate by 0.36%, compared to $580.71 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 three times [2] Future Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.66 on revenues of $638.65 million, and for the current fiscal year, it is $7.34 on revenues of $2.74 billion [7] - The estimate revisions trend for Globant is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Internet - Software and Services industry, to which Globant belongs, is currently ranked in the top 18% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Core Insights - Globant reported a strong financial performance for Q4 and the full year 2024, with revenues reaching $642.5 million for the fourth quarter, representing a 10.6% year-over-year growth, and $2,415.7 million for the full year, up 15.3% year-over-year [6][9][20] - The company emphasized its strategic investments in AI over the past decade, which have differentiated it from competitors and contributed to its growth [6][9] - Globant's operational efficiency is reflected in its healthy profit margins, despite navigating evolving market dynamics [9] Fourth Quarter 2024 Financial Highlights - Revenues for Q4 2024 were $642.5 million, a 10.6% increase from Q4 2023 [7][20] - IFRS Diluted EPS for Q4 was $0.85, down from $0.96 in Q4 2023, while Non-IFRS Adjusted Diluted EPS increased to $1.75 from $1.62 [7][20] - IFRS Gross Profit Margin was 35.7%, slightly down from 35.9% in Q4 2023, while Non-IFRS Adjusted Gross Profit Margin improved to 38.3% from 38.0% [7][20] Full Year 2024 Financial Highlights - Full year revenues reached $2,415.7 million, a 15.3% increase from 2023 [6][20] - IFRS Diluted EPS for the full year was $3.72, compared to $3.64 in 2023, and Non-IFRS Adjusted Diluted EPS rose to $6.40 from $5.74 [7][20] - The company reported a total gross profit of $863.4 million for the year, with a Gross Profit Margin of 35.7% [20] Other Metrics - As of December 31, 2024, Globant had 31,280 employees, with 29,198 being technology, design, and innovation professionals [7][20] - Geographic revenue breakdown for Q4 2024: 55.2% from North America, 20.4% from Latin America, 17.7% from Europe, and 6.7% from New Markets [7][20] - The company served 1,012 customers in the last twelve months, with 346 accounts generating over $1 million in annual revenues, up from 311 the previous year [7][20] 2025 Outlook - For Q1 2025, revenues are estimated to be between $618.0 million and $628.0 million, reflecting an 8.2% to 10.0% year-over-year growth [13] - Full year 2025 revenues are projected to be between $2,635.0 million and $2,705.0 million, indicating a 9.1% to 12.0% year-over-year growth [13]

LUXEMBOURG, Feb. 13, 2025 /PRNewswire/ -- Globant (NYSE: GLOB), a digitally native company focused on reinventing businesses through innovative technology solutions, today announced it will release results for the fourth quarter and full year ended December 31st, 2024 on Thursday, February 20th, 2025 after the close of regular market hours.Following the release, Martin Migoya, Globant's CEO & co-founder; Juan Urthiague, Globant's CFO; Patricia Pomies, Globant's COO; and Diego Tártara, Globant's CTO, will di ...

Core Insights - Globant has partnered with Red Sea Global to develop a digital program aimed at enhancing the visitor experience at The Red Sea, a major tourism destination in Saudi Arabia, aligning with the country's Vision 2030 strategy [1][2][4] Group 1: Partnership and Objectives - The collaboration focuses on creating a seamless, immersive, and personalized visitor journey through advanced technology solutions [1][3] - The initiative aims to set a new benchmark for connected visitor experiences globally, with the potential for adoption by other destinations [5][9] Group 2: Technological Integration - The program will utilize advanced technologies such as artificial intelligence, IoT, and data analytics to provide real-time, tailored interactions for visitors [3][9] - The partnership emphasizes the importance of technology in redefining tourism by enhancing convenience, personalization, and sustainability [4][8] Group 3: Destination Overview - The Red Sea is positioned as a luxury tourism destination with five resorts currently operational and plans for 11 more by 2025, ultimately reaching 50 resorts by 2030 [6] - The destination aims to lead in regenerative tourism, focusing on positive impacts on the environment, society, and economy [7] Group 4: Company Profiles - Globant is recognized for its expertise in digital innovation and has been named a leader in AI services and media consultation [11] - Red Sea Global is a key player in Saudi Arabia's economic diversification efforts, focusing on sustainable development across various sectors [11][13]