Q2 2021 Globant SA Earnings Call
[music].
Good day and welcome to global second quarter 2021 earnings conference call I'm, Amit Singh head of finance for the U S and global head of Investor Relations. All participants on this call will be on listen only mode. After today's presentation there'll be an opportunity to ask questions.
Please note. This event is being recorded and gene live on Youtube by now you should have received a copy of the earnings release. If you have not a copy is available on our website investors <unk> dot com.
Our speakers today are Martin Mcglynn are co founder and Chief Executive Officer, One Earth Yagur, Chief Financial Officer, Patrizia pull me as Chief operating Officer gigabit angle Behan, President of global <unk>, and Latam and devoted thorough global Chief Technology Officer.
Before we begin I would like to remind you that some of the comments on our call today may be deemed forward looking statements. This.
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.
Please note that we follow Ifr as accounting rules in our financial statements. During our call today, We will report non FRS or adjusted measures, which is how we track performance internally and the easiest way to compare <unk> to our peers in the industry you will find a reconciliation of <unk> and non <unk> measures at the end of the press release, we published on our Investor.
<unk> website announcing this quarter's results.
I would now like to turn the call over to Martin <unk> our CEO.
Thanks, Amit and Hello, everyone I'm happy to be with you again.
Today, we will look back at our strong first half of 2021.
We will also share with you our vision to reinvent ourselves and our professional services industry.
But first let's look at Q2, we closed the quarter with $305.3 million in revenue.
This represents 67, 1% year over year growth in brakes last quarter's record as our strongest year over year growth as a public company and as we look back glance revenue has surpassed 1 billion over the last 12 months for the first time, we expect to.
Those this year with more than $1.2 billion in revenue.
I also have the pleasure to share with you other important news.
We're now a team of 20000 Globus working all over the world. It took US 16 years to reach 10000 employees do they just two years later, we have doubled our team I'm proud of the extraordinary growth and the individuals who have joined us along the way.
They inspire me every single day.
As we know strong technology companies are defined by creative resilient and adaptable people on their teams globally.
Glover has put this at the center of our work.
We will continue to scale up our talent worldwide, while fostering our culture of innovation entrepreneurialism and reinvention every person business uneven nature itself faced a need for reinvention they.
They need to evolve and to become better versions of themselves and to navigate through constant challenges.
It is our vision to seek reinvention in everything we do we apply this concept to our clients as we help them create a way forward into a sustainable future.
We don't just supply technology for short term, we designed profound transformations to go beyond digital.
And we apply it to ourselves as we provide our growers with the tools to augment their work to develop new skills and to build and transform their own career paths.
I'm happy to see how this case of reinvention is resonating with our investors community.
Confidence in our track record and our vision was reflected in our last follow on in May.
It was more than five times oversubscribed, almost all of the participants were fundamental long term investors.
This capital helped solidify our plans to expand both organically and through acquisitions.
This quarter, we acquired an 80% stake in wall Merrick.
They specialize in developing marketing automation technology, combining lead management online marketing and sales enablement.
With this strategic integration, we want to disrupt the digital sales strategies for our clients grow and has always focused on helping the world's top brands interact better with their customers with wilmar, Rick on board and our digital sales studio we want to bring this full benefit of the digital on Gorgon.
The resolutions to improve the sales of new products.
Now I would like to share some thoughts on what we have been doing for our clients all regions have seen growth as we continue to make our mark all over the world starting in North America globally is proud to be serving the national Football League to help build a launch a new set of apps for connected Tvs that will.
Enable fans to best engage and enjoy the sport they love.
In the robotic process automation space globally is proud to be partners without formation anywhere and the development of their latest enterprise platform automation anywhere robotic interface.
That provides unique capabilities to end users in personalizing their automation tasks for both the front and back office.
Vivid seats, a leading online ticket marketplace is partnering with globe and in multiple digital initiatives from delivering experiences in the marketplace to creating a data driven approach for growth.
In gaming growing convenience, providing co development expertise for <unk> latest version for the guitar teaching music game Rocksmith plus.
They're winning rocksmith franchise has sold over $4.8 million copies already.
At Zynga blow undeveloped tools for systems for its CSR racing franchise with over 130 million downloads worldwide.
Our clients and partners span multiple sectors and disciplines, which brings me to the inter American development Bank.
After working with them for several years on their digital transformation journey, we are widening our scope of work we have embarked on a three ear aam's engagement for Salesforce and service now towers.
With just few months and we have begun to see the result, with all quality Kpis met 97% of satisfaction on customer surveys in the organization and high engagement from business partners and team leaders. This quarter, we celebrated a decade of partnership with stride and education technology comes.
<unk> that supports more than 2 million students with online and blended learning solutions, we began working with them to create learning experiences and improve their educational platform over the years, we have provided tools in areas from data analytics, improving assessment systems and refine their digital age.
<unk> content. It is great to see the passion in our teams to challenge the status quo. We're also working with a digital transformation with telecom.
We have successfully launched a new version of their E. Commerce platform. It is a key part of the new digital ecosystem in the construction space. We are working closely with ETP in creating a technological foundation of its new division coal new ways.
This work is same at impacting and reinventing the supply value chain.
We're supporting <unk> in their ambition to be a key player in the transformation of the construction industry in the emerging market for Offsite lightweight and modular building solutions.
Now to our geographic expansion.
Last month, we opened up our new offices in Montevideo with precedent Raisler carrier Bowl in attendance.
Over the coming months, we look forward to opening new offices throughout the global regions, where we work I'm looking forward to sharing more of those details with you in the future.
Last month marked the seventh anniversary of our IPO and I still feel like we're just getting started as a market opportunity keeps increasing.
According to IDC the numbers of companies that embrace a digital transformation strategy is up 43%. Since 2019, we then need to constantly adapt in order to face uncertainty. We anticipate this market to continue expanding we'll also see how certain key areas continue.
To be disruptive and garner more attention from companies and example of this our blockchain technologies.
Which are enabling the decentralization of finance, while also penetrating in more industries, particularly even in the past few months. They took initiation of assets has become an increasing trend.
<unk> chain is already disrupting the concepts of work business and commerce worldwide and it's just getting started devoted a thorough our CTO will talk more about what we are doing in this field. Shortly similarly artificial intelligence adoption continues to expand and the AI market.
Is expected to grow by $76 billion by 2025, we're confident that these trends together with the growth of our market will allow us to grow fast.
As we continue our expansion it is important to understand that the future belongs to sustainable companies that pay attention both to their P&L the impact in their communities and all their stakeholders sustainability is an essential element to everything we do at Logan I'd.
I'd like to draw attention to our expanding E S. She activities under our B kind initiative.
As we are committed to being a carbon neutral company by the end of 2021 global submitted last week. Its first carbon disclosure project with this annual disclosure, we hold ourselves accountable to environmental transparency, we're committed to acting responsibly as we create a way forward into.
Thriving sustainable future.
In line with this accountability. We're also officially committed to the science based target initiative.
We have joined the more than 1000 companies all over the world that are working to limit global temperature rise to one five degrees Celsius above preindustrial levels.
Now, let's talk on how global has been innovating and working on its signature tools.
Like to bring my friend cofounder and prescient of club Onyx keyword and Libyan.
He will share some of the updates of this division focused on our unique technologies and new revenue streams give it please.
Thanks, Martin it's a pleasure for me to be with all of you today.
Let me tell you built out below Opex, we established global text, we the space, where we nurture <unk> homegrown innovation. So we can apply it and turn it into exponential revenue opportunities.
As we aim to transform our industry global next is applying AI to augment their way we calls the way we test we design, we have collectively smarter, we reinforce our teams culture, how we recruit and how we assemble teams.
This is enabling us to achieve scalability into everything globally for us.
Our global X. We are also exploring opportunities to enable our customers to run their own industries. For example to enable new conversational channels as we are doing with our technology, but then that solution fluid labs globally.
<unk> X is key to continue driving the entrepreneurial spirit that has made globally what it is today.
In addition to these we believe global is a lighthouse for many interpreters pursuing exciting opportunities.
Let me go over some highlights of our initiatives.
Our patented augmented coding technology enhancing the coding process by seamlessly accelerating our developers to write better safer codes in less time.
We are building a strong leadership team to carry the project forward.
Appointed towards her electrical our CEO of augmented coding to make it happen.
The words, you used to be the CEO of <unk>, one of our acquisitions from last year and he has an extensive track record as a successful founder and entrepreneur.
<unk> X will also oversee stormy app always which many of you know has been key to establishing a strong culture within <unk>.
Two very stormy App Act as a novel system that creates a high performing organization, where everyone feels part of a strong aligned team providing a seamless personal experience to every employee in an environment of high autonomy deep.
The pandemic has represented a huge shift for the future of work.
While we still need to create an engaging environment to attract talent and build a diverse and inclusive organization. We also believe that being able to assemble a strong organizations in a distributed work environment is key.
We have seen how clients like Prisma and many others are Athenian stormy app a solution to strengthen the organization culture. During these challenging times as the digital transformation requires a human transformation I'm excited to continue expanding this operating system to build a smarter future for our customers next to <unk>.
Pick out some exciting new studios I would like to introduce Diego Carole Ferrand, Our Chief Technology Officer Diego.
Thanks, Stuart Hi, everyone I'm excited to be with you again to talk about global it's expanding array of studios.
First I'd like to go over <unk> blockchain studio, we have been seeing continued adoption of the technologies throughout many industries and sectors. The race of Mst's cryptocurrency adoption and use of private and semi private blockchain has created assertion demand where a bumping the suffering through our new practices.
Smart contract digital took initiation decentralized platforms and decentralized finance, we will continue to be sending them build a centralized somebody selling solutions that boost strategic business value, enabling efficiency immutability and transparency.
In financial services, the lithium market is being disrupted through AI.
This brings the number of powerful benefits for financial institutions, including data driven decisions improve customer experience and significant cost savings.
We haven't been working on the strategic integration of glucose steam to lowered due to her extensive experience in financial consulting 13 will integrate with us to form the backbone of our new digital lending studio.
We leverage the in depth expertise on the sector combined with our expertise in AI for our product offering in the most innovative lending practices. Examples include using advanced analytics to ensure the cyber risk profiles anticipating defaults months in advance and cost savings through optimizing the collection processes.
This past quarter, we successfully held our digital Disruptors vision of the glow in the words, we wanted to recognize those individuals who are driving the change within their organizations for technological innovation of products processes and culture that digital disruptors.
After receiving over 2000 nominations from four continents 22 leaders were chosen and recognized for their efforts. The first part of this initiative. However was not even the award itself, but the conversation of innovation that we were able to spread.
This is a mark of cultural change that global wants to achieve we look forward to hosting these awards again next year.
I'll now turn it over to plateau or CLO.
Thank you Diego Hi, everyone.
I'd like to start with our talent.
Martin mentioned that in July we achieved the important milestone of being 20000 Globe Arts.
That was possible thanks to our track record for growth.
Focusing on Q2, our hiring accelerated and we finished the quarter with 19428 Kloppers.
<unk> thousand 350 of which were technology design and innovation professionals.
More than 2000 of these new hires where IP professionals.
Up 15, 9% year over ear in order to meet the strong market demand. This is the strongest year over year growth in our IP head count as a public company.
We are entering a new phase of global growth story.
With our team, becoming more diverse more global and more skilled.
We welcome this growth and the diversity.
Constantly exposing ourselves to new ways of thinking and perspectives are what have move us forward.
However, as we bring in more members to our team we will continue to foster a culture of agility resilience and reinvention at every step of the way as.
As we look for where the scope of our hiring will be global in India, Europe, The U S, Canada and Latin America.
In order for our business to reach its full potential we need to be number one place to work in the industry and we Orient the global career path to offer challenges projects incentive benefits and exposure that are unique to club and.
It's important for us that a honda exist and skills and also develop new ones. That's the way we'll launch at <unk> University last year, which you may remember from our previous calls.
Today the results are in 93% of our Clovers went through their trainings on.
This platform there are 2700 learning resources available so that our clobbered can build their capabilities based on their passions generating more engagement and completion rates.
This is part of our focus at club and enabling art lovers to have autonomy in building their careers.
Attrition for the past 12 months was at 16, 6%.
This increase is largely attribute it to the very strong demand environment for talent as we exit. This pandemic. We now expect the attrition rate to normalize around 15.5% to 17.5% level in the near mid term despite the modest increase in.
Attrition the net employee additions for the quarter set a new record for the company.
Our value proposition to our employees continue to be very very appealing.
In the income and months, we will also be holding another edition of the women that build outwards.
I look forward to bringing together a panel of the touches like the last time and being able to give a better spotlight to the trailblazer Lehman in technology today.
We want to keep them a greater recognition so that their qualities of leadership innovation and drive can spread.
Now a few points on our revenue performance. This knee was our largest customer app for the quarter growing strongly at 61, 3% year over year, and 10, 9% quarter over quarter.
We continue to be very well diversified within Disney having the majority of its business units.
Other than Disney the rest of our accounts collectively also grew at a solid 67, 8% year over ear and 13, 2% quarter over quarter as we experienced improvement in most industry verticals.
Moreover, during the quarter, we continued to successfully cross sell services with the companies we acquire in the recent past.
Regarding the progress of our 100, a square strategy. During the last 12 months ended June 13th 2021, we had 18 accounts about $10 million in annual revenue compared to 13 customers for the same period last year. We also had 100.
54 customers with more than $1 million of annual revenues compared to 113, one year ago.
Overall, we continue to expand our relationships with our key accounts that phase for our continuous growth.
Looking at diversification of our revenues by geographic regions. During the second quarter of 2021, 63.8% of our revenues were in North America.
71, 6% in Latin America, and others and 13, 2% in Europe.
Our efforts on expanding our presence in Europe continued to bear fruit with Europe witnessing another quarter of a strong acceleration in revenues growing at 242.1% year over year and at 23, 7% on a sequential basis.
We are enthusiastic about the demand we see in our growing market and foresee healthy pipeline ahead.
For 2021, and beyond we will keep applying our talent to help them make it happen and ensure that they have the latest training to be great.
Nice to be with all of you again to go into final detail I'll pass it over to Juan <unk> our CFO.
Please.
Thank you and good afternoon, everyone I hope, you're all doing well, let me start by summarizing the results of our second quarter 2021, I will then discuss our guidance for the third quarter and the full year 2021.
Our business in the second quarter showed robust acceleration and we're very pleased to announce a quarter of record revenues and industry, leading financial performance.
Our revenues for Q2 were $305.3 million, representing a solid 67, 1% year over year growth on a sequential basis, our revenues for Q2 increased 13% showing a very healthy trend. This quarter's revenue growth even exceeded our last quarter's record.
Growth revenue growth in Q2 represents the strongest year over year revenue growth since we are a public company.
This moment, we also do not foresee any material incremental risks to our business going forward due to the COVID-19 pandemic. This is largely because we derived the majority of our revenues from the U S where the business environment is largely back to pre COVID-19 level. During the initial days of the pandemic, we have communicated that they are in.
Current environment coming out of the pandemic will likely be stronger than the demand environment before the pandemic.
Our results for Q2 on our robust pipeline make us believe that demand for our services is evolving in line with our expectations and we strongly believe we can deliver robust and elevated levels of growth in the upcoming years.
Turning now to profitability, our adjusted gross profit for the period increased to $119.9 million.
Representing 39, 3% adjusted gross margin 110 basis points improvement compared to the second quarter of 2020.
Got to your breakeven income for the quarter amounted to $49.4 million or 16, 3% of revenues compared to $24.6 million or 13, 5% of revenues for the second quarter of 2020, adjusted operating margin improved 270 basis points year over year the improving.
Demand and pricing environment, unless G&A efficiencies driven by our increasing size along with our increasing exposure to services will help us break revenue and employee growth linearity will continue to have a positive impact on our adjusted operating margin at the same time, we will continue our ongoing invest.
Once in the company to capture the huge opportunity in front of us.
<unk> effective tax rate for the quarter was 21, 2% below our guidance as taxes came in lower than our initial expectations in certain geographies.
Our GAAP net income for the second quarter of the year totaled $36.5 million, representing 12% adjusted net income margin compared to $17.5 million, representing nine 6% adjusted net income margin for the second quarter of 2020.
Adjusted diluted EPS for the quarter was 88 cents based on $41.7 million average diluted shares for the quarter compared to 45 cents for the second quarter of 2020 based on $38.8 million average diluted shares for the quarter.
Adjusted EPS for the quarter in place a solid 94, 3% year over year growth strongest year over year growth. Since we're a public company are significantly above our record year over year revenue growth in the quarter.
In addition, our average diluted shares for the quarter were higher than guidance due to our follow on offering during the quarter.
Moving on to the balance sheet, our cash and cash equivalents and short term investments as of June 32021 amounted to $465 million. During Q2, we successfully raised $286.2 million in a follow on transaction I would like to thank our investors for the support on this transaction which was.
More than five times oversubscribed currently our credit facility is fully undrawn.
We also continued to successfully execute on capital allocation strategy with the integrations of recently acquired companies going as planned now, let's talk about our business going forward.
I would like to share with you our outlook for the Q3 and for the full year 2021.
As discussed earlier, we are witnessing a very robust demand environment.
In addition, we do not foresee any material incremental risks to our business going forward due to the COVID-19 pandemic based on current visibility. We expect Q3.2021 revenues to be at least $325 million implying.
Implying 56, 8% year over year growth at this point with Olympic Specced, any FX impact to our third quarter revenues Q.
Q3, adjusted operating margin is expected to be in the $15, 5% to 17% range and objected diluted EPS is expected to be at least 22 cents assuming for a $2.7 million average diluted shares outstanding for the quarter.
Regarding the full year 2021, given the overall improvement in the market conditions, we're significantly increasing our revenue guidance this quarter and we now expect revenues to be at least $1.236 billion, representing 51, 8% year over year growth our industry leading growth guidance.
Significantly exceeds end market growth rates, we currently assume no FX impact or full year 2021 revenues.
For October 21, we continue to expect our adjusted operating margin to be in the $15 to 17% range absorbent will continue to strongly invest in globalizing, our operations training programs and cutting edge technologies and expanding our sales coverage.
Income tax rate is expected to be in the 23% to 25% range. Both for Q3.2021 and for the full year 2021. Finally, we expect adjusted diluted EPS to be at least $3.58 for the full year 2021, representing a solid 57% year over year growth.
Adjusted EPS guidance assumes for a 2 million average diluted shares outstanding for the full year 2021.
Thank you very much.
Yeah.
Thank you Ron.
So as we go through the question and answer section of this call I will announce your name and that Wayne. Please on mute your line and ask a question. Please.
Please remember to mute your line. After your question has done well.
All of our request you to please limit your time to one question and one follow up thank you very much.
So the first question today comes from the line of Tien Tsin Huang from JP Morgan engine Bill go ahead.
I Hope you can hear me and see me. Thanks for taking my question guys. Good results here just.
The Wall America acquisition, I thought was really interesting it looks like it's about a platform or product acquisitions, a little bit different than what you guys have done in the past. So so curious what attracted you to this and could we see more of these kind of deals going.
Going forward.
Hey, how are you.
Thank you for the question.
I think I think it is it's a very interesting point your question because.
For the first time, we did a platform acquisition in it.
It sounds in that we can spread out across all our studios and all our.
All our customers around.
Around the globe.
It's quite interesting because.
It goes straight into this decoupling strategy that you are worth mentioning.
Together with below Onex and.
It's very interesting app.
Interesting app.
It gives us like a different perspective on how to build a team based on those kind of non linear revenue comparison connected to two two hour growth.
So yes, it's a different it's a different animal for the first time and we are trying we are experimenting is not a huge company, but it's something that it could be a good I would say generate a lot of synergies with our core and digital sales airport around many of these studios and there are many different.
Customers.
So it's very complementary and I think it will be we will be learning a lot out of that.
New new member of our family.
No that's great it's exciting I like it so on the just my quick follow up then maybe out for one just on the always ask about gross margin.
So it sounds like attrition is in a good place and Youre still able to hire.
He considerations for second half gross margin.
It sounds like no surprises on the people side supply side, just wanted to make sure that's the case.
Thank you Tien tsin, so for the rest of the year, we continue to see very good traction in terms of.
Talent acquisition, you know in terms of hiring.
Attrition did come up a little bit, but we don't really expect any meaningful impact on our gross margin numbers. We continue to see gross margin at similar levels, where we are where we were back in Q1 as well so I would say that the carrier to 40% range remains valid.
Even with our <unk>.
<unk>.
Market that that is a little bit.
More challenging, but again, even though it came up a little bit as you can see why the net additions in this quarter, we remain extremely competitive and we actually have.
The largest net there is a number ever in our history. So that's basically the way we are seeing.
Yes.
And Keith Engineering.
Alright. So the next question comes from the line of Ashwin <unk> from Citi Ashwin. Please go ahead.
Yeah.
Okay.
Thank you and great job congratulations.
I guess, let me start with <unk>.
It seems as though.
Demand not not really that concerned so let me ask you a little bit more about the supply side.
Just to check whether you are modifying or changing your hiring are.
Retention practices, you know what you're doing to.
Further scale up.
Your supply side.
Any any changes there if you can kind of comment.
Thank you for your question Ashwin I think that we are having a.
360 plan on this I mean, it's not only that we are doing that one strategy. I mean, we are trying to to have plan, although there and what our global has been asking and under what the Martinez. The market is really really hard in terms of talent acquisition, we are being more diverse than ever and more global we are hiring.
We're using artificial intelligence and some of our players as seen in the way we are interviewing in the way we are going into the talent of course are in.
In terms of the retention, we have been putting in place different kind of a benefit from and plans. According to the seniority and to their profiles of each of our clubhouse.
We are trying to keep a very close conversation with our leaders in terms of working very close with the bloggers also there. So I think that what we have been seeing is strong.
Irene.
As I mentioned before and this is a record for us in terms of net additions. This quarter. So I think that the pipeline looks really really nice for us in those topics and I think that of course, India Europe U S, Canada, and Latam set or our markets there and we are getting deeper in those areas.
Got it got it.
And.
Maybe I can just return back to the Walmart question.
Our engine said really fascinating act.
Acquisition.
Maybe a two parter.
And I understand it's relatively small but how.
How would the go to market work in a platform that farm acquisition like that is the intent to.
Sell a platform or sell the follow on services or the add on services.
Flow from that.
And any particular reason infrastructure this way with the 80%.
Good question, asking as all of them.
I E.
I think that the well the first thing is that we need to understand exactly what this platform.
And they are connected with a very specific.
Cycle very specific part of the cycle of the of the digital sales process, which is the connection between when they leave it's already generated and how you convert that into real sales.
We haven't seen many platforms do indeed, indeed, you know pretty much all the bathroom scope on the on the on the power that is before that and one of the rationales for our investment was saying okay. There's.
There is an opportunity there to sell exactly that part which is not very common to all of our customers are trying to expand the digital sales.
Effort and help them to convert better into into cells their needs.
And that's the whole platform that David Cole platform. So I expect to use that platform in pretty much all our projects were new things need to be launched.
Or no roads Nathan to be launched.
And the reason why we did the 80% was a negotiation matter with the with the entrepreneur.
<unk> wants to keep on keep on writing the winner of ours.
Was he was writing has up to now and he has a pretty large market share in Europe and now we are seeking to expand that into many many other many other plane without about the 80% with our board and we have a call option on that so it won't be it won't be a problem for us to get the 100%.
<unk>.
In the near future who wants.
Alright, thank you.
Thank you very much for the question.
Thank you for being here today.
Thank you Ashwin as the next one in line at the next analyst Bryan Bergin from Cowen <unk> <unk>.
Ryan go ahead.
Yeah.
Hi, all thank you for quite a while here.
I wanted to ask about the reorganization that you formalize this year. So understanding it's still very recent can you talk about.
How that's performed relative to your expectations and any aspects of the regional management changes that have surprised you.
So look I mean, the reorganization was pretty much in line with our with our ideas from a long time ago. So there is no.
It changes there I think that.
I think that every single person who has been promoted.
It's really performing great. Their regions are really rock in if you see the numbers or the growth of each of the regions are really impressive. So we are very pleased with the results and with the quality of the team that we put it together.
And I think we're.
As I said on my my after 28 quarters of being CEO of a public company I still think that we're at the very beginning of the story and we are at the very beginning of what we can do as a management team. So I think that it is something that.
I am very pleased with I am seeing the team itself is very happy with that too which is very very important and.
I think we form a pretty unique and very solid organization.
With our 20000 global now that we have to manage and it's ready to grow much faster than before as we demonstrated in this quarter.
They're pretty solid.
Foundation.
Okay makes sense and then just a follow up on supply can you talk about what organic head count growth in the quarter. One also how is mix.
Regions looking at <unk> and can you talk about where you're going to push most aggressively in the second half on head Count addition.
Sure. Thank you Brian for the question so.
In terms of.
The net additions in Q2 I think only.
Yeah.
And I live in less than 100 people came from acquisitions. So we're talking primarily.
And our app purely organic number.
Out of the door 2100 people.
Joined the company.
In terms of mix.
You will see going forward is.
Incremental.
<unk> implement incremental lowers out of Mexico out of Brazil.
Out of India, and then the rest of the countries and regions will will follow in line. We may also have some.
Additionally growth in eastern Europe.
Alright, thank you.
Youre welcome. Thank you very much Brian.
Alright. Thank you very much Brian. So next question comes from Maggie Nolan from the limb Blair Maggie. Please go ahead.
Yeah.
Hi can you hear me okay, yes.
Yes, yes, yes.
Okay.
So I wanted to take NFL app on on a previous question. When you think about some of that at peak delivery geographies.
Or are you seeing any differences in the level of wage inflation in each of the Argentine addresses in the App currently app.
Yeah, I think if I of course different countries have different salary increases because of local currencies because of inflation in that market.
Typically you know.
See Argentina without with a higher salary increase in local currency, but when you look at that.
In U S dollars it goes.
Close to the medium of the company so.
In general or do we see it.
Is there a number you know about five 6% for the full year in dollar terms companywide.
That is a little bit higher maybe than <unk>.
Some time ago as presented compared to last year, but I think it's something manageable that we can.
We can offset through pricing, we can offset offset.
Through utilization and that's why we continue to see our gross margins in the same range than in the past we don't expect.
Any of these to have.
A material impact on the numbers and in fact, we continue to have the same.
Right. So we already provided.
Okay. Thank you and then.
Augmented coding app in the past <unk> talked about it again today are your clients asking you about similar kind of accelerant for their internal organization.
How do you view the advancement of technology.
That as additive to aircraft market.
For the money.
And for a voice there candidly we are applying AI not just to ourselves, but also to our customers in a variety of projects.
In some cases, we have seen that app.
It makes sense for us to actually apply it and create the technology related augmented coding not just for ourselves, but we also believe that many other organizations could benefit from that.
Current customers.
And our future customers. So that's for that reason is that we have assembled a strong team with the leadership of the awards here.
We expect that to continue growing.
So.
And turning to your question, yes, we are applying augmented to pretty much everything one of the interesting things is that we started this process of thinking AI on every aspect of what we do five years ago. Today, we are using it to pretty much a lot of things as Patricio worth mentioning.
We're asking them to conduct interviews to assemble teams.
<unk> called that out of test that are behind that or to share knowledge. So there are a.
A very wide array of solutions that we expect could benefit not only ourselves but.
As well.
Thank you.
Got it.
Thank you Marie.
Okay. Thank you very much Maggie.
So the next question comes from our two Alaska from Ito at peak.
Hi, Thank you for taking my question.
Also congratulations on the results are very impressive.
I think my first question is I wanted to ask.
In terms of new logos, how that evolves and are you seeing.
A big increase in new companies.
And that you are serving and I think just following up on the mortgage question. This is also Fergie for example, we've seen recently.
A company like Microsoft releasing.
Copilot Dunkin' Cup, which is this augmented coding platform as well.
It's interesting to see that Youre doing something in the same space.
Maybe just if you could give us a broad view of how.
How big that opportunity is there it would be interesting to have your view on that that would be that would be helpful.
Enzo.
Let me take that.
Loyalty and have grown up in the data okay.
No sorry, I broke and you'll be done with the first part of the question. The first question.
New logos here, yeah in terms of total customer once enrollment number went up.
But let's say you know we really.
<unk> focus on the total number of customers, we focus on those that have a big potential to become multi million dollar accounts.
And.
For example, we now have nine accounts over to aluminum compared to seven a year ago with Athena.
Antena accounts over $10 million compared to 13, a year ago. So the wallet share continues to increase now rolling into the <unk>.
Specific no off some of them were mentioned during the call. We continue to see very good traction to get new customers the company.
The brand is.
Africa much stronger over the recent past and we are seeing great traction in the industry region right.
Yeah.
EMEA Latam and the U S continue to bring new logos.
Thank you Juan.
Regarding <unk> going on gift.
Income copilot definitely.
There is a lot of movement in the area and we believe that.
Beilock actually groups, but we are on the right track we started working on this.
Several years ago, and we obtained a patent related to <unk>. We believe that the award is hitting the <unk> what is it in the order of in return was vein.
There will be more and more tools to speed up the development process.
We believe that by using augmented coding developers can make somewhat varies.
Safer.
Is cleaner than it's going to be doing in much less time, Doug what we used to so.
What do we see as the main difference between what our bylaws.
Our winter bowing argument is we are working a lot on assembling and creating value across a team of developers. So software is not just augmenting. This is not just auto maintain yourself coding, but do we need in the in the middle of a deal.
<unk>, who is already producing gold are looking for synergies between all the developers and enterprise.
As a result of that.
Target is going to be enterprise class develop birth not just individuals.
Perfect. Thank you very much and congratulations a huge but its a huge validation for us I mean, the compiler is a huge validation and we announced it and we started work in many years ago, when we announced it a year ago.
Before copilot, so we have.
Some experience is always interesting because you guys move first and then I think IBM and Microsoft.
<unk>.
Interesting validation servicer.
Perfect. Thank you very much I think the next question.
The next question comes from Moshe <unk> from Wedbush Mushy. Please go ahead.
Hey, guys. Thanks for taking my question.
Congrats on very strong numbers. So the first one is for one.
Can you remind us what was the organic growth for the quarter.
And then what's embedded in terms of organic growth for calendar 'twenty, one and then the second one is a follow up from our team.
Clearly organic growth has been accelerating some of it is driven by the pandemic.
The further adoption of digital what are we doing to sustain this growth beyond 'twenty, one and 'twenty two.
In terms of your.
Your product mix your ecosystem and.
In terms of what Youre doing to market these offerings or whatever youre doing to your end markets I E. Your enterprise clients. Thanks.
Thank you Marci.
Yes.
Out of the 67% of our unit growth in Q2, we estimate organic growth to be around 48%.
So.
Very very.
Solid <unk> growth in <unk>.
Q4 or Q3.
Our out of the 57% year over year growth.
A growth.
We estimate our one growth.
Around 43%.
And for the full year number which is 1 billion to continental on $36 million.
52% year over year growth.
There it becomes a little bit more.
A difficult.
For two basically differentiate the tool, but we estimate our one <unk> growth will be around 38% for the year.
So these are pretty pretty robust numbers.
It's an accelerating significant acceleration GAAP compared.
The second part of your question.
There's a there's a lot of things that we're doing I mean first platforms.
And all the things that we are accelerating like give us describe from augmented coding into army App and all the rest of the platform, but we are in Walmart.
Just acquired so on so forth.
For us it's central to maintain it.
Differential value proposition for our customers.
That's on the core and then of course, our studios and the studios will keep on evolving will keep on adapting.
We are thinking about the idea of launching.
As to industry Reinvention studios, I mean, how to reinvent our specific industry by Howe.
Students that are specialized not just in the traditional industry about how to reinvent that specific industry.
So our cereals R R.
Our living animal and they are growing and they are changing as we grow and as we need to adapt to different.
Two different equation and to different market opportunities now.
The pandemic has accelerated ever.
Every aspect of the organization in every aspect of the demand and I don't think that that will be.
Its slowing down slowing down in the near in the near future.
I don't know whats going to happen in the future near future I see the demand in a very in a very strong manner.
And I see the pipeline very healthy and grow at that level, but we haven't seen before.
So all in all I think the situation is really pretty.
Pretty I would say interesting for global impact.
Mostly.
We used to say.
But our expectation was typically 20% organic.
A quick T cells.
This point.
We do see.
Our next year at this point or area 23, 24% organic.
Plus maybe about 1% from the recent deals that we did.
And of course, we will update our vehicles by and we'll get closer to it we are in.
Understood. Thank you.
Youre welcome. Thank you Mollie.
Thank you very much Moshe so the next question comes from Maria is available from Santander. Please go ahead.
Ed.
Hi, guys. Thanks for the call and congratulations on a Super strong result.
Very clear that demand is not an issue here, but can you give us some color on the pricing and the competitive environment in your key markets and studios.
And I think my follow up question would be on the margin side, if you see any specific industry vertical or.
Geography, helping that margin improvement oriented happening all across the board. Thank you.
Yeah.
Oh, where her with the second part of that.
Well start with the first part of the way.
On the.
Hirings.
On the supply side of the business.
We have a very attractive employee value proposition.
We are.
Continuing to expand.
Our.
Talent development centers around the globe.
We have done it.
In Uruguay, we have done it in Colombia, we will do it in other CDC in some of the countries, where we already are and we are looking into.
Other options also for next year, we will see a lot of room to continue growing existing locations existing countries, but of course, we also look at other development centers, where we can.
Sure.
Continue to grow in our company.
As for the second part of your question.
So start to finish on the first part again is at least I was discussing before we look at our company in multiple ways.
We have to have the best culture.
To attract talent, we have to have very competitive compensation will help the hub very competitive benefits. We haven't heard the risk projects you have to have this thing not just for people.
Im joined on work from low and they can they need to see that our glow on there will be able to develop their career.
Italy, maybe work from a different country.
Working as an industry.
Maybe switching to Korea to any of the technology I mean, when youre thinking about attracting or retaining talent you have to think about all those things right. It's not one single solution.
100.
One size fits all things you need to look at multiple things rather than with people and everyone has been somewhat duration on the on the industry side. When you look at margin.
The Street.
At the end of the day.
They're not really significant differences within one in lithium and another.
You do have sometimes one customer even within one industry.
That may be.
They have a higher margin than others.
On the technology it depends on the mix.
Off locations it depends on the on the type of person that you're either anyway. So I don't think that you need to think about different industries generating a different mix in terms of margin.
<unk> necessarily the case.
I think adding to that.
Adding to that the island to measure one thing that is really important a couple of quarter ago.
Announced that that would create a club and university and all of that in EMEA and today, we can say that more than 90% of our Glover went through that University I mean, there's more than 2700 air resources, there to skill and Reskill our patents.
<unk> changing industries and trying to scale on risk killer talent. There is one of the thing that is also key at this time are there.
And as you can see that our results in terms of hiring and net addition that our record quarter.
Is not only because I mean, we have a hedging gain of brokerage and it's also because of our culture is really attractive.
We are working in a very agile way, we have had this mix culture app. So I think that is.
As I mentioned.
Mentioned before is that we attack all of these things in a terrific position and we are thinking about the complaint as a team all there the level of the company is thinking about how we can improve that how we can get closer to our global and their families. So I think it is really important so.
And we can guarantee the quality of the delivery and in trying to hold all of these things together.
Okay. That's very helpful. Thank you.
Thank you Maria.
Thank you very much Maria the next question is from Steve Enders from Keybanc, Steve. Please go ahead.
Yeah.
Okay, great. Thanks for thanks for taking my question here.
Hope everyone's staying safe.
Safe and healthy.
I just wanted to check on the two new studios that you released Aaron.
In the past couple of months since we last talk I guess, how are you thinking about utilizing.
These across your across your customer base and kind of the.
The big points of focus for them moving forward.
No I didn't get the question sorry income.
New students.
We think we can use them no longer customers Oh, Yeah. I mean every every new studios being thought in a pretty in a pretty horizontal way.
So each time, we created a new studio with think that this can be a solution either for everyone really pretty much every industry that we have in our portfolio.
Now we are thinking about creating stories on how to reinvent specific industry, which will be nurture from those original studios and from the experience that we have we have been gaining with our customers along the years and I think that that's something that that.
That is quite remarkable as long, we never thought that having a silo approach on one studio and another studio sorry, one industry or another industry was constructive because you have people that know our one industry that they can now cannot create an innovative solution bringing.
L ideas or solutions from another.
Article.
So we try always to focus on our studios that doesn't mean that we know we don't know about industry without a lot of our industries and about how to reinvent that those industries.
<unk>.
I think that theyre going across pretty much all.
All the all the every new studio will be growing around August later digital sales through the or the digital collection studio or the block chain studio the digital lending studio, Although studios goes pretty amount for cross sell into now on the other studios that we're creating now we haven't created yet.
Thank you Linda.
The idea will be to embed the industries that we.
<unk> touch as we're reinventing global too.
To remain the professional services space.
Okay, that's great to hear and just sort of clarify I think you said in the script that you are thinking about.
Creasing sales investments.
Through the second half of the year, just wondering how and kind of the areas that youre looking at deploying these are investments.
Yes, the SLC medicines will be mainly increasing our team and increasing how we connect with our customers.
I think we have a huge challenge in front of us as we exit the pandemic.
Hopefully soon.
Two how to keep connecting with customers, how we keep investing in those relationships.
During the whole pandemic relief on the stock of relationships and our people now needs to keep on doing the.
The flow off of relationships and I think that that that deserve some investment there nothing that will go away of the SG&A that we're already spending, but maybe focus in investment in different places or a different type of profiles.
As we move forward I also considering that we.
Our side.
Gets bigger and bigger.
We need to change the profile of the people.
That connect with those customers or improve those profiles or get more senior people to start to.
Beach higher level solutions.
That's going to be the whole idea on the sales side.
As you can see from the guidance doesn't imply an impact.
Operating margin level.
With all the growth that we're delivering.
In terms of revenue growth and keeping our our gross margins in line and there is room to do all of those investments.
As well as expanding geography in the different geographies, where we are and in some in some geographies where whenever.
Perfect. Thanks for taking my questions.
Thank you very much.
Thanks, Steve.
The next question comes from the line of Benjamin Wang mentioned in regards to surrender at Jeffrey and <unk>. Please go ahead.
Tier one congratulations on the quarter I just wanted to ask a question on sort of.
The visibility that you guys might have.
<unk> or the mix.
And in terms of I guess specific industry verticals.
Are you seeing somewhat.
I guess hospitality trends are kind of come back. Thanks.
Okay. So in terms of O&M.
Yes, I think if I was in terms of visibility.
I think we are.
In our market.
We are pretty much every single company in every industry.
Is.
<unk> has decided to invest in digital transformation.
And that of course creates a.
Our an amazing opportunity for companies like <unk>, who are you know.
Position exactly in that market.
That in a way helped us.
That the pipeline that we have.
There has been growing significantly even you know the contracted or the contracts that we have.
We already signed so far increase the visibility that we have compared to other years. That's why at this point, we know we were able to basically raise a little bit.
The next year initial guidance that we just provided.
I'd say that visibility has increased but of course it is related as well with the incremental investments that we have seen in pretty much every industry as for the question on travel I'll, let Marty answer that one yeah look in terms of the industries I mean, we have seen.
In the massive growth on on consumer retail and manufacturing on the financials based on media and entertainment on professional services space I mean, all those sectors has been growing very very fast talking about travel and hospitality is like the latest thing that will be reactivated after after the ban.
<unk>, so we have seen.
Very modest growth over there and.
I am expecting deal those things to kick in as we are having pretty clear signals from from that sector.
That demand is catching up very very fast even more in this summer.
In Europe and the U S.
And.
I expect that to recover very fast.
In the next coming months.
But still didn't happen. So it really is there is there is the by far the largest.
Most affected industry.
After after the pandemic happened.
There is an opportunity of course and our industry once it comes back.
That should be some some tailwind for Maryland.
Yes.
Okay. Thank you very much Benjamin.
The next question comes from the line of retailers and a lot of inter works alongside Diego at Goldman Sachs.
Ahead.
Hey.
Good evening, all and congrats on the results and on the new guidance. So my first question would be.
First as a follow up.
Travel and hospitality, how does that industry factor each of the guidance you guys just mentioned that.
Not something that is already recovery. So could we expect that if it recovers faster than expected that could generate some upside to your guidance this year or some further upside to revenue growth next year.
Yes.
Go ahead.
I mean for this year, we are already now so we're not assuming a meaningful.
A recovery of that industry for the rest of the year.
The guidance, we are not we're not considering any senior.
A significant recovery on that industry.
For the first part of next year.
Understood. Thank you and also as a follow up on while Merrick could you give us some additional color on how it has to be fair for me before acquisition and also on how easy. It is true adapted software to different geographies in terms of.
Our partner channels and any other local factors that could be.
The issue here. Thank you.
Kurt.
The performance of the company before we acquired was pretty impressive and that was one of the drivers on the rationale of the acquisition.
In terms of the geographic adaptation that you're suggesting is something that is much more affordable than than what we expected at the very beginning.
The changes that we need from region to region are very small very minor or even nothing in some in some of the parts of the application.
So not a concern at all.
Very clear thank you very much.
You're welcome. Thank you. Thank you Victor.
Thank you very much richer and so the last question for today comes from the line of James Michael and James Michael Works alongside our vendor on <unk> at Piper Sandler. Please go ahead.
Yeah.
You might have some audio issues there so I think that'll be all for the Q&A section today. So thank you all for joining I will now pass.
The mine to Martin to provide the closing comments Martin. Please go ahead.
Thank you very much.
<unk>.
Thank you everyone for participating.
I would like to think in a very special way to all our investors to all our analysts to all of you that are supporting us in every aspect on everything that we do all our management team that is doing a terrific job between the terrific job and <unk>.
Extremely happy to share. These results with you we're very excited about the future of the company about the reinvention that we can do for our industry and the reinvention that we can do for our customers. So thank you very much looking forward to see you in the next quarter. Thank you bye bye.
Yeah.
[music].
Yes.
Yes.
Sure.
Yes.
Okay.