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Financial Data and Key Metrics Changes - The company reported revenues of $617.1 million for Q3 2025, which is a 0.4% year-over-year increase and a 0.5% sequential increase, exceeding previous guidance by $2 million [20][24] - Adjusted gross profit margin remained stable at 38.1%, while adjusted operating margin increased by 50 basis points sequentially to 15.5% [20][22] - Adjusted net income for the quarter was $69.7 million, maintaining an adjusted net profit margin of 11.3% [22] - Free cash flow generated during the quarter was $67.5 million, achieving a free cash flow-to-adjusted net income ratio exceeding 96% [22][23] Business Line Data and Key Metrics Changes - The company’s AI bots and subscription model are gaining traction, with over 1,000 engagements related to GenAI and CoreAI currently running, representing a third of overall projects [8][19] - The share of clients identified as having "hundred square" potential increased to 56.7%, up from 50% last year [7] - The pipeline reached an all-time high of $3.7 billion, reflecting a 30% year-over-year growth [5][20] Market Data and Key Metrics Changes - The AI market is projected to reach $4.8 trillion by 2033, indicating a 25x increase over the past decade [5] - The company has seen a shift in the AI space from hype to tangible adoption, with a significant number of clients moving towards AI transformation projects [5][31] Company Strategy and Development Direction - The company is focused on sustainable growth and delivering exceptional value through innovation, particularly in AI solutions tailored for various industries [3][4] - The introduction of AI bots represents a significant evolution in how organizations leverage technology, moving towards a subscription revenue model [6][9] - The company aims to redefine consulting by eliminating traditional barriers and focusing on outcome-driven transformations [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, noting that demand trends across the client base have started to stabilize despite a fluid macro environment [23][24] - The company anticipates revenue for Q4 2025 to be at least $605 million, reaffirming previous guidance, and expects a non-IFRS adjusted operating margin of at least 15% [23][24] - Management highlighted that the pipeline has grown significantly, with a clear evolution towards more transformational projects [31][40] Other Important Information - The company authorized a $125 million share repurchase program, reflecting confidence in long-term prospects [23] - The effective tax rate for the quarter was 29.4%, influenced by the depreciation of the Argentine peso [21][22] Q&A Session Summary Question: Are clients looking for AI use cases in retailing or banking? - Management noted that consumer experience is being transformed with active projects changing interfaces from navigational to conversational [27][28] Question: Will AI projects move into mainstream production? - Management indicated that there is a clear evolution from exploratory projects to transformational efforts, with many clients now integrating AI into their operations [30][31] Question: What is the outlook for client budgeting in 2026? - Management expressed optimism for 2026, noting that conversations with customers are ongoing and initial numbers indicate more growth than in 2025 [39][40] Question: How is the pricing environment affected by GenAI? - Management stated that there is no major pressure on pricing, as the value added by their offerings allows them to maintain pricing effectively [45][48] Question: What factors could raise conversion rates for the pipeline? - Management highlighted that improving global economic conditions and a deeper understanding of AI benefits will help accelerate conversion rates [80][81]

Financial Data and Key Metrics Changes - The company generated $617.1 million in revenue for Q3 2025, which is up 0.4% year-over-year and 0.5% sequentially, exceeding previous guidance by $2 million [4][20] - Adjusted gross profit margin remained flat at 38.1%, while adjusted operating margin increased by 50 basis points sequentially to 15.5% [20][22] - Adjusted net income for the quarter was $69.7 million, maintaining an adjusted net profit margin of 11.3% [22] - Free cash flow generated during the quarter was $67.5 million, achieving a free cash flow-to-adjusted net income ratio exceeding 96% [22][23] Business Line Data and Key Metrics Changes - The AI bots and subscription model have nearly doubled their share in the pipeline, indicating strong demand for AI-based solutions [8][9] - The top five clients grew sequentially by 2.1%, which is above the company's average growth [6] - The share of clients identified as Hundred Square potential increased to 56.7%, up from 50% last year [7] Market Data and Key Metrics Changes - The pipeline reached an all-time high of $3.7 billion, representing a 30% year-over-year growth [5] - The AI market is expected to grow to $4.8 trillion by 2033, indicating a significant opportunity for the company [5] Company Strategy and Development Direction - The company is focusing on sustainable growth and delivering exceptional value through innovation, particularly in AI solutions [3][4] - The shift to a subscription revenue model is being embedded with 17 of the top 20 customers, reflecting a strong acceptance of this new approach [9][84] - The company aims to redefine consulting by eliminating traditional barriers and focusing on outcome-driven models [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a strong pipeline and increased client engagement in AI transformation projects [34][41] - The company anticipates better growth rates in 2026 based on the current pipeline and client conversations [41][75] - Management acknowledged the challenges posed by the macro environment but remains confident in the company's ability to adapt and grow [24][25] Other Important Information - The company authorized a $125 million share repurchase program, reflecting confidence in long-term prospects [5][23] - The effective tax rate for the quarter was 29.4%, significantly impacted by the depreciation of the Argentine peso [21][22] Q&A Session Summary Question: Are clients looking for AI use cases in retailing or banking? - Management noted that consumer experience is being transformed with many active projects focusing on conversational interfaces across various industries [28][30] Question: Will AI projects move into mainstream production? - Management indicated that there is a clear evolution from exploratory projects to transformational efforts, with many clients now integrating AI into their core operations [33][34] Question: What is the outlook for headcount and growth in 2026? - Management stated that a combination of higher utilization and new hires will be necessary to support growth, with optimism for better numbers in professional services [78][79] Question: How is the pricing environment affected by GenAI? - Management does not foresee major pricing pressure, emphasizing the value added in their offerings and maintaining revenue per head [48][49] Question: What factors could raise conversion rates for the pipeline? - Management highlighted that improving global economic conditions and a deeper understanding of AI benefits will help accelerate conversion rates [88][90]

Core Insights - Globant has launched version 2.3 of its proprietary AI platform, Globant Enterprise AI (GEAI), which integrates the Agentic Commerce Protocol (ACP) to enable AI agents with transactional capabilities [1][3][5] Group 1: Product Features - The new version of GEAI enhances interoperability, allowing enterprises to build, deploy, and manage AI agents across various platforms, thus accelerating secure and scalable AI development [2] - The incorporation of ACP allows AI agents to facilitate transactions through conversational interfaces, leveraging existing payment systems for secure and enterprise-ready transactions [3][5] - GEAI 2.3 is designed to be flexible and adaptive, enabling organizations to create and configure their own agents through a simple interface [5] Group 2: Impact and Performance - Organizations utilizing GEAI have reported an 80% reduction in legacy system modernization times, enabling quicker adaptation to market demands [6] - In software development, companies have achieved a 50% reduction in costs, significantly enhancing operational efficiency [6] Group 3: Market Position and Recognition - Globant is recognized as a leader in AI services and has been named a Worldwide Leader in Media Consultation, Integration, and Business Operations Cloud Service Providers by IDC [10] - The company has over 30,000 employees and operates in more than 35 countries, serving major clients like Google and Electronic Arts [10]

Core Insights - Globant has announced a significant upgrade to its proprietary AI platform, Globant Enterprise AI (GEAI), which now supports Model Context Protocol (MCP) and Agent2Agent (A2A) Protocol, enhancing interoperability and integration capabilities for global organizations [1][2][3] Group 1: Platform Features - The integration of MCP and A2A transforms GEAI into a fully interoperable ecosystem, allowing enterprises to build, deploy, and manage AI agents across various platforms [2][8] - MCP enables GEAI agents to interact with leading enterprise tools and applications globally, while A2A allows for autonomous interactions with platforms like Salesforce's Agentforce and Google Cloud's Vertex AI [2][3] Group 2: Impact and Efficiency - Organizations utilizing GEAI have reported an 80% reduction in legacy system modernization times, facilitating quicker adaptation to market demands [4] - In software development, companies leveraging GEAI have achieved a 50% reduction in costs, significantly improving operational efficiency [4] Group 3: Strategic Positioning - The update positions Globant at the forefront of next-generation enterprise AI infrastructure, offering enhanced automation and integration capabilities with advanced AI models [3][8] - GEAI serves as a foundational platform for secure, scalable, and collaborative AI development within enterprise environments [8]