Q1 2026 Globant SA Earnings Call

May 14, 2026

Speaker #1: Good afternoon, and welcome to Globant's first quarter 2026 earnings conference call. I am Arturo Langa, investor relations officer at Globant. All participants on this call will be in listen-only mode.

Arturo Langa: Good afternoon. Welcome to Globant's Q1 2026 Earnings Conference Call. I am Arturo Langa, Investor Relations Officer at Globant. All participants on this call will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded and streamed live on YouTube. By now, you should have received a copy of the earnings release. If you have not, a copy is available on our website, investors.globant.com. We will begin with remarks by our Chief Executive Officer, Martín Migoya; our Chief Technology Officer, Diego Tartara; and our Chief Financial Officer, Juan Urthiague, followed by a Q&A where they will be joined by our Chief Revenue Officer, Fernando Matzkin. Before we begin, I would like to remind you that some of the comments on our call today may be deemed forward-looking statements.

Speaker #1: After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded and streamed live on YouTube. By now, you should have received a copy of the earnings release.

Speaker #1: If you have not, a copy is available on our website, investors.globant.com. We will begin with remarks by our chief executive officer, Martin Migoya. Our chief technology officer, Diego Tartara, and our chief financial officer, Juan Urthiague, followed by a Q&A where they will be joined by our chief revenue officer, Fernando Matzkin, before we begin I would like to remind you that some of the comments on our call today may be deemed forward-looking statements.

Speaker #1: 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.

Arturo Langa: This includes our business and financial outlook and the answers to some of your questions. Such statements are subject to the risks and uncertainties as described in the company's earnings release and other filings with the SEC. Please note that we follow IFRS accounting rules in our financial statements. During our call today, we will report non-IFRS or adjusted measures, which is how we track performance internally and the easiest way to compare Globant to our peers in the industry. You will find a reconciliation of IFRS and non-IFRS measures. At the end of the press release, we published on our investor relations website announcing this quarter's results. I will now turn the call over to Martín Migoya.

Speaker #1: Please note that we follow IFRS accounting rules in our financial statements. During our call today, we will report non-IFRS or adjusted measures which is how we track performance internally and the easiest way to compare Globant to our peers in the industry.

Speaker #1: You will find a reconciliation of IFRS and non-IFRS measures at the end of the press release we published on our investor relations website announcing this quarter's results.

Speaker #1: I will now turn the call over to Martin Migoya.

Speaker #2: Good afternoon, everyone, and thank you for joining us. We are standing at the beginning of the most important transition the technology services industry has lived through.

Martín Migoya: Good afternoon, everyone, and thank you for joining us. We are standing at the beginning of the most important transition the technology services industry has lived through. This nearly $2 trillion industry is being rewired in front of us, and the signals coming from the AI ecosystem and from the largest software companies are all pointing in the same direction. The influx of capital, the need for the right talent, and the need to deploy cost-effective AI solutions quickly has never been greater. We have been providing AI solutions to some of the world's most important companies for more than a decade. Globant was built for this moment. For 23 years, we have been building deep engineering capabilities and a profound understanding of our clients' businesses across more than 1,200 customers. We have built a strong AI native services practice on top of that foundation.

Speaker #2: This nearly $2 trillion industry is being rewired in front of us, and the signals coming from the AI ecosystem and from the largest software companies are all pointing in the same direction.

Speaker #2: The influx of capital, the need for the right talent, and the need to deploy cost-effective AI solutions quickly has never been greater. We have been providing AI solutions to some of the world's most important companies for more than a decade.

Speaker #2: Globant was built for this moment. For 23 years, we have been building deep engineering capabilities and a profound understanding of our clients' businesses across more than 1,200 customers.

Speaker #2: We have built a strong AI-native services practice on top of that foundation, enterprises do not need just models, they need AI-native services, delivered by AI agents, supervised by humans, driving their agentic transformation.

Martín Migoya: Enterprises do not need just models. They need AI native services delivered by AI agents supervised by humans driving their agentic transformation. That is exactly what Globant has been executing since 2025, and it is exactly what the market is now validating. This is our moment, and we are entering it from a position of strength. As I meet with our customers around the world, their need to deploy AI solutions that add value and transform their business has never been greater and strengthens my conviction in our innovative business model. This is further supported by the convergence of the most influential voices in technology. Sequoia Capital, through Julien Bek, is calling services the new software, noting that for every $1 spent on software, roughly 6 are spent on services, and that AI lets enterprises buy outcomes instead of tools, with autopilots replacing copilots and meaningfully different unit economics.

Speaker #2: That is exactly what Globant has been executing since 2025, and it is exactly what the market is now validating. This is our moment, and we are entering it from a position of strength.

Speaker #2: As I meet with our customers around the world, their need to deploy AI solutions that add value and transform their business has never been greater, and strengthens my conviction in our innovative business model.

Speaker #2: This is further supported by the convergence of the most influential voices in technology. Sequoia Capital, through Julian Beck, is calling services the new software, noting that for every dollar spent on software, roughly 6 are spent on services, and that AI lets enterprises buy outcomes instead of tools, with autopilots replacing co-pilots, and meaningfully different unit economics.

Speaker #2: Satya Nadella is calling 2026 the year agentic systems start to reshape how enterprises consume software, with the boundary between software and services gradually narrowing.

Martín Migoya: Satya Nadella is calling 2026 the year agentic systems start to reshape how enterprises consume software, with the boundary between software and services gradually narrowing, and capital is following the thesis. This Monday, OpenAI launched a $4 billion deployment company, and one week earlier, Anthropic launched a $1.5 billion enterprise AI venture with a different group of PE firms. The two most valuable AI companies in the world are putting capital behind delivery, not just behind models. We are proud to be an OpenAI partner since 2025, and every dollar of capital flowing into this layer expands the market for the model we have already built. Q1 2026 revenue came in at $607.1 million above the high end of our guidance.

Speaker #2: And capital is following the thesis: This Monday, OpenAI launched a $4 billion deployment company, and one week earlier, Anthropic launched a $1.5 billion enterprise AI venture with a different group of PE firms.

Speaker #2: The two most valuable AI companies in the world are putting capital behind delivery, not just behind models. We are proud to be an OpenAI partner since 2025, and every dollar of capital flowing into this layer expands the market for the model we have already built.

Speaker #2: Q1 2026 revenue came in at $607.1 million, above the high end of our guidance. We are reaffirming the midpoint of our full-year revenue outlook, while raising the lower end of the range.

Martín Migoya: We are reaffirming the midpoint of our full year revenue outlook while raising the lower end of the range, narrowing our guidance with greater confidence in our trajectory. Importantly, Q2 guidance returns to sequential growth, with the upper end of our guided range translating into year-over-year growth. Q1 appears to mark the trough of this cycle, and we see Q2 as a meaningful step toward a healthier trajectory. Free cash flow was strong and operating margin held within our guided range. Our pipeline remains healthy and continues to build with strategic AI native opportunities we expect to convert through the rest of 2026.

Speaker #2: Narrowing our guidance with greater confidence in our trajectory. Importantly, Q2 guidance returns to sequential growth, with the upper end of our guided range translating into year-over-year growth.

Speaker #2: Q1 appears to mark the trough of this cycle, and we see Q2 as a meaningful step toward a healthier trajectory. Free cash flow was strong and operating margin held within our guided range.

Speaker #2: Our pipeline remains healthy, and continues to build with strategic AI-native opportunities we expect to convert through the rest of 2026. On capital allocation, our original share repurchase program announced last September was completed during Q2, and our board has now authorized a new share repurchase program of up to $125 million, over the following six quarters.

Martín Migoya: On capital allocation, our original share repurchase program announced last September was completed during Q2. Our board has now authorized a new share repurchase program of up to $125 million over the following 6 quarters, representing close to 7.5% of today's market cap and close to 15% of market cap in aggregate between the two plans. The program will be executed at management's discretion, balanced against our investment priorities, including the continued build-out of our AI Pods business. We are committed to returning capital to shareholders because we believe Globant is undervalued relative to the trajectory we see in our pipeline and in AI Pods. A year ago, we announced the shift toward AI native technology services on top of 2 decades of engineering and industry expertise.

Speaker #2: Representing close to 7.5% of today's market cap, and close to 15% of market cap in aggregate between the two plans. The program will be executed at management's discretion, balanced against our investment priorities, including the continued build-out of our AI pods business.

Speaker #2: We are committed to returning capital to shareholders because we believe Globant is undervalued relative to the trajectory we see in our pipeline and in AI pods.

Speaker #2: A year ago, we announced the shift toward AI-native technology services, on top of two decades of engineering and industry expertise. Our core business remains the foundation of the company, and the AI-native layer is its natural evolution.

Martín Migoya: Our core business remains the foundation of the company, and the AI native layer is its natural evolution. Our AI Studios are progressing nicely, layering on nonlinear revenue, incorporating talent, sophisticating our offering, and getting closer to what our customers need. For each industry we serve, we are getting deeper. Our global delivery capabilities are helping our clients run the AI transformation they need with greater leverage, better unit economics, and a more strategic seat at the table. Critical differentiators of our enterprise solutions are model independence and token sovereignty. Our clients are never locked to a single AI provider. Our platform routes intelligently across more than 140 models, giving enterprises the freedom to adopt the best available technology as the landscape evolves. Every token consumed stays within the enterprise's own governance. Their data does not train third-party models. Their institutional knowledge remains entirely their own.

Speaker #2: Our AI studios are progressing nicely, layering on non-linear revenue, incorporating talent, sophisticating our offering, and getting closer to what our customers need. For each industry we serve, we are getting deeper.

Speaker #2: Our global delivery capabilities are helping our clients run the AI transformation they need, with greater leverage, better unit economics, and a more strategic seat at the table.

Speaker #2: Critical differentiators of our enterprise solutions are model independence and token sovereignty. Our clients are never locked to a single AI provider. Our platform roots intelligently across more than 140 models, giving enterprises the freedom to adopt the best available technology as the landscape evolves, and every token consumed stays within the enterprise's own governance.

Speaker #2: Their data does not train third-party models. Their institutional knowledge remains entirely their own. This is particularly beneficial for many of our innovative clients concerned with their intellectual property in highly competitive environments.

Martín Migoya: This is particularly beneficial for many of our innovative clients concerned with their intellectual property in highly competitive environments. Our answer to the agentic transformation is the combination of two things: our AI Pods and our Forward Deployed Engineers. The AI Pods are AI-native service units, each specialized by task and by industry that deliver outcomes instead of effort. The Forward Deployed Engineers are the human layer that lands inside our customers, embeds AI Pods into their reality, and drives the agentic transformation from the inside. The annual recurring revenue of our AI Pods has reached $32.8 million as of March, with strong growth versus Q4. AI Pods is a young, fast-compounding practice in our portfolio, and the percentage growth rates we are seeing at this stage reflect early base dynamics that will naturally moderate as scale builds.

Speaker #2: Our answer to the agentic transformation is the combination of two things: our AI pods and our forward-deploy engineers. The AI pods are AI-native service units; each specialized by task and by industry, that deliver outcomes instead of effort.

Speaker #2: The forward-deploy engineers are the human layer that lands inside our customers, embeds AI pods into their reality, and drives the agentic transformation from the inside.

Speaker #2: The annual recurring revenue of our AI pods has reached $32.8 million, as of March, with strong growth versus Q4. AI pods is a young, fast-compounding practice in our portfolio, and the percentage growth rates we are seeing at this stage reflect early base dynamics that will naturally moderate as scale builds.

Speaker #2: We have already incorporated the AI pods business model in 40% of our top 20 revenue-generating accounts, up from 30% from last quarter. The AI pods pipeline stands at $352 million.

Martín Migoya: We have already incorporated the AI Pods business model in 40% of our top 20 revenue-generating accounts, up from 30% from last quarter. The AI Pods pipeline stands at $352 million, including a clear path to coverage in 70% of our top 20 clients. Gross margins on this model continue to run materially above our blended company gross margin. As AI Pods grow as a share of our revenue mix, their structurally higher margin can begin to contribute to our blended margin profile over time. AI Pods and AI-native services are an important evolution of how we deliver value and a meaningful growth lever going forward. Within our digital studios, data and AI, which includes core AI deployments such as NLP, analytics, facial recognition, machine learning, and data science, is now our second-largest studio by revenue right after engineering.

Speaker #2: Including a clear path to coverage in 70% of our top 20 clients. Gross margins on this model continue to run materially above our blended company gross margin, as AI pods grow as a share of our revenue mix.

Speaker #2: Their structurally higher margin can begin to contribute to our blended margin profile over time. AI pods and AI-native services are an important evolution of how we deliver value, and a meaningful growth lever going forward.

Speaker #2: Within our digital studios, data and AI—which includes core AI deployments such as NLP, analytics, facial recognition, machine learning, and data science—is now our second-largest studio by revenue, right after engineering.

Speaker #2: Both studios are growing markedly above the company average, with data and AI growing north of 25% year over year, and engineering in the mid-single digits.

Martín Migoya: Both studios are growing markedly above the company average, with data and AI growing north of 25% year-over-year and engineering in the mid-single digits. This growth mix reflects the priorities shaping enterprise technology investment today. AI is present in 100% of our pipeline. Every project, without exception, incorporates it either as a core element or as a satellite component. Within that, 26% of opportunities are AI core, a figure that rises to 32% when looking only at deals originated in 2026, reflecting the accelerating shift in how clients are coming to us. We are particularly proud of the evolution of our revenue per Glober. As of Q1 2026, we are run-rating a level north of $90,000, representing 8% year-over-year growth.

Speaker #2: This growth mix reflects the priorities shaping enterprise technology investment today. AI is present in 100% of our pipeline—every project, without exception, incorporates it either as a core element or as a satellite component.

Speaker #2: Within that, 26% of opportunities are AI core, a figure that rises to 32% when looking only at deals originated in 2026, reflecting the accelerating shift in how clients are coming to us.

Speaker #2: We are particularly proud of the evolution of our revenue per glober. As of Q1 2026, we are run rating a level north of $90,000, representing 8% year over year growth.

Speaker #2: This has been supported by the steady expansion of our AI pods business and the AI tooling we have embedded into our delivery. This is the structural signature of a company moving up the value chain.

Martín Migoya: This has been supported by the steady expansion of our AI Pods business and the AI tooling we have embedded into our delivery. This is the structural signature of a company moving up the value chain. What we are seeing in the market reinforces every part of this picture. Our big deals with large customers continue to gain momentum, and AI transformation programs are now the predominant pattern across our pipeline. Three large pools of demand are converging on AI-native delivery. Technical debt and core modernization, estimated at $1.5 trillion to $2 trillion across the world's 2,000 largest public companies. Interface and experience debt across customer-facing surfaces and agentic process transformation, the redesign of business processes and operating models around agents. Globant is positioned across all three.

Speaker #2: What we are seeing in the market reinforces every part of this picture. Our big deals with large customers continue to gain momentum, and AI transformation programs are now the predominant pattern across our pipeline.

Speaker #2: Three large pools of demand are converging on AI-native delivery. Technical debt and core modernization, estimated at $1.5 to $2 trillion, across the world's 2,000 largest public companies.

Speaker #2: Interface and experience debt across customer-facing surfaces, and agentic process transformation. The redesign of business processes and operating models around agents. Globant is positioned across all three.

Speaker #2: We are winning the modernization pool as an AI-native partner, as the IGT relationship with Apollo demonstrates, and private equity is becoming a structural channel for us.

Martín Migoya: We are winning the modernization pool as an AI native partner, as the IGT relationship with Apollo demonstrates, and private equity is becoming a structural channel for us. The largest prize, however, is agentic process transformation. AI is now adopted across the vast majority of our projects, and the real gains come not from layering AI on top of unchanged processes, but from re-engineering the business around agents and rewiring the organizational chart itself. Across our studios, our 100 squared accounts continue to gain traction and maintain momentum. Our top 50 clients grew over 5% year-over-year in Q1, with our top 10 and our 2 to 5 cohort growing at similar rates, all meaningfully above the company average. AI Pods are now showing up in concrete ways across every studio. A quick tour. In financial services, our work with Banco Galicia is scaling.

Speaker #2: The largest prize, however, is agentic process transformation. AI is now adopted across the vast majority of our projects, and the real gains come not from layering AI on top of unchanged processes, but from re-engineering the business around agents and rewiring the organizational chart itself.

Speaker #2: Across our studios, our 100 squared accounts continue to gain traction and maintain momentum. Our top 50 clients grew over 5% year over year in Q1, with our top 10 and our 2 to 5 cohort growing at similar rates, all meaningfully above the company average.

Speaker #2: AI pods are now showing up in concrete ways across every studio. A quick tour. In financial services, our work with Banco Galicia is scaling.

Speaker #2: They have validated the productivity, speed, and quality of our AI pods, and we are now successfully deploying and operating models to manage the high use case backlog.

Martín Migoya: They have validated the productivity, speed, and quality of our AI Pods, and we are now successfully deploying an operating model to manage the high use case backlog. We are now focused on implementing a new AI Pod dedicated to the definition and construction of data products with an initial use case targeting the reduction of the customer contact rate. We are also applying AI Pods in our work with a leading student loan company in the US to modernize its loan management systems at scale and speed. In healthcare, life sciences and private equity studio, we are migrating five clients to the AI Pods model. At EmployBridge, the first pilot was executed in Q1, and we expect the remaining scope to convert during Q2 into a fully AI Pod engagement. Johnson & Johnson continues to be the largest account in this studio with continued growth.

Speaker #2: We are now focused on implementing a new AI pod dedicated to the definition and construction of data products. With an initial use case targeting the reduction of the customer contact rate.

Speaker #2: We are also applying AI pods in our work with a leading student loan company in the US, to modernize its loan management systems at scale and speed.

Speaker #2: In healthcare, life sciences and private equity studio, we are migrating five clients to the AI pods model. At employbridge, the Q1, and we expect the remaining scope to convert during Q2 into a fully AI pod engagement.

Speaker #2: Johnson & Johnson continues to be the largest account in this studio, with continued growth. In media, entertainment, sports, and hospitality, our 15-year relationship with The Walt Disney Company continues to expand dialogue, with several discussions for AI pods.

Martín Migoya: In media, entertainment, sports and hospitality, our 15-year relationship with The Walt Disney Company continues to expand dialogue with several discussions for AI Pods. We are keen to grow with the company by delivering an interconnected experience anchored by Disney+ and across all core businesses. The LA Clippers, one of our most visible partnerships through our work on the Intuit Dome, is transitioning their full operation to AI Pods. Our partnership with FIFA is now in its fifth year. Diego Tartara will share how we are progressing our support across FIFA's business digital initiatives. At the same time, we have expanded our role as their technology partner for the 2026 and 2027 World Cups, enhancing their digital platforms, delivering a new fan engagement mobile application, and bringing our AI-native capabilities to one of the world's most watched sporting events.

Speaker #2: We are keen to grow with the company, by delivering an interconnected experience anchored by Disney+ and across all core businesses. The LA Clippers, one of our most visible partnerships through our work on the Intuit Dome, is transitioning their full operation to AI pods.

Speaker #2: Our partnership with FIFA is now in its fifth year. Diego Tartara will share how we are progressing our support across FIFA's business digital initiatives.

Speaker #2: At the same time, we have expanded our role as their technology partner for the 2026 and 2027 World Cups, enhancing their digital platforms, delivering a new fan engagement mobile application, and bringing our AI-native capabilities to one of the world's most watched sporting events.

Speaker #2: The Mexican Football Federation has chosen Sportion Performance to build the most advanced football intelligence ecosystem, including new physical AI applications to further improve sports performance.

Martín Migoya: The Mexican Football Federation has chosen Sportian Performance to build the most advanced football intelligence ecosystem, including new physical AI applications to further improve sports performance. The agentic solution implemented in La Liga exemplifies the characteristics of a modern sports organization and will serve as a lighthouse for the industry. We now work with all of the big three cruise lines and look forward to growing our work in this space based on our expertise in customer experience. In gaming, we continue to develop our AI project with Riot. Since booking the largest deal in this sector with them last year, we are now integrating our AI Pods model into quality assurance. In retail, we introduced AI Pods into our dialogue with one of the largest retailers in the United States, with whom we have worked for four years.

Speaker #2: The agentic solution implemented in La Liga exemplifies the characteristics of a modern sports organization, and will serve as a lighthouse for the industry. We now work with all of the big three cruise lines, and look forward to growing our work in this space based on our expertise in customer experience.

Speaker #2: In gaming, we continue to develop our AI project with Riot. Since booking the largest deal in this sector with them last year, we are now integrating our AI pods model into quality assurance.

Speaker #2: In retail, we introduced AI pods into our dialogue with one of the largest retailers in the United States. With whom we have worked for four years.

Speaker #2: The retailer was previously considering a global compatibility center, but exposure to AI pods shifted the conversation toward an agentic-first solution by unlocking more value and efficiency to build a new mobile app and loyalty program.

Martín Migoya: The retailer was previously considering a global compatibility center, but exposure to AI Pods shifted the conversation toward an agentic-first solution by unlocking more value and efficiency to build a new mobile app and loyalty program. In the technology space, we are happy to announce that we are strengthening our strategic partnership and 360-degree relationship with Google, where we are projecting strong growth into new areas. In the energy space, we continue our three-year relationship with the U.S. Green Building Council, migrating our work on their primary certification, LEED version 5, to AI Pods. Although the change has been recent, we have already seen significant improvements in process efficiency, and we look forward to seeing this growth in the future. The aviation space has been going through some turbulence by volatility following the sudden rise in fuel prices.

Speaker #2: In the technology space, we are happy to announce that we are strengthening our strategic partnership and 360-degree relationship with Google, where we are projecting strong growth into new areas.

Speaker #2: In the energy space, we continue our three-year relationship with the US Green Building Council, migrating our work on their primary certification, LEED version 5, to AI pods.

Speaker #2: Although the change has been recent, we have already seen significant improvements in process efficiency, and we look forward to seeing this growth in the future.

Speaker #2: The aviation space has been going through some turbulence by volatility, following the sudden rise in fuel prices. This has further reinforced the efficiency gains delivered through our AI pods model.

Martín Migoya: This has further reinforced the efficiency gains delivered through our AI Pods model. 2 of our largest airline clients will be transitioning from a traditional delivery model to AI Pods as part of a multi-year commercial and digital transformation. This shift will allow them to increase throughput, reduce cycle times, and operate with a more flexible cost structure, helping offset fuel-driven pressure while continuing to modernize core systems, improve direct channels, and enable more dynamic retailing capabilities. In our new markets region, although our clients face many challenges due to the currently volatile situation in the Middle East, Globant continues steadfast in being a strong and stable partner, focusing on long-term growth. Our partnership with Qiddiya City has centered on major projects, including Six Flags Qiddiya City and Aquarabia, the largest water park in the Middle East, with Globant building the end-to-end digital backbone for the guest journey.

Speaker #2: Two of our largest airline clients will be transitioning from a traditional delivery model to AI pods, as part of a multi-year commercial and digital transformation.

Speaker #2: This shift will allow them to increase throughput, reduce cycle times, and operate with a more flexible cost structure, helping offset fuel-driven pressure while continuing to modernize core systems, improve direct channels, and enable more dynamic retailing capabilities.

Speaker #2: In our new markets region, although our clients face many challenges due to the currently volatile situation in the Middle East, Globant continues steadfast in being a strong and stable partner, focusing on long-term growth.

Speaker #2: Our partnership with Kidia City has centered on major projects, including Six Flags Kidia City, and Aquarabia, the largest water park in the Middle East.

Speaker #2: With Globant building the end-to-end digital backbone for the guest journey. We are also partnering with Saudi Arabia's local organizing committee to reinvent the football experience centered on the fan ID ecosystem, focusing on a unified AI-powered platform connecting identity, venue access, safety, and fan engagement at scale.

Martín Migoya: We are also partnering with Saudi Arabia's local organizing committee to reinvent the football experience centered on the Fan ID ecosystem, focusing on a unified AI-powered platform connecting identity, venue access, safety, and fan engagement at scale. The Enterprise AI Studio anchors the platform layer that powers AI Pods with multi-cloud integration across Azure, AWS, Oracle, and Google Cloud. Our partnerships with the major hyperscalers, AWS, Google, Microsoft, and Oracle Cloud Infrastructure all expanded this quarter, and we were named Google Cloud Country Partner of the Year in Argentina for the fourth time. With AWS, this quarter we surpassed the original KPIs from our strategic cooperation agreement signed last September, aimed at several ambitious indicators, including annual recurring revenue and new solution development. We also continued to deepen our relationship with NVIDIA, which is central to how we deliver AI-native services at the compute and infrastructure layer.

Speaker #2: The Enterprise AI Studio anchors the platform layer that powers AI pods. With multi-cloud integration across Azure, AWS, Oracle, and Google Cloud, our partnerships with the major hyperscalers—AWS, Google, Microsoft, and Oracle Cloud Infrastructure—all expanded this quarter, and we were named Google Cloud Country Partner of the Year in Argentina for the fourth time.

Speaker #2: With AWS, this quarter we surpassed the original KPIs from our strategic cooperation agreement signed last September. Aimed at several ambitious indicators, including annual recurring revenue, and new solution development.

Speaker #2: We also continued to deepen our relationship with Nvidia, which is central to how we deliver AI-native services at the compute and infrastructure layer. Together, these alliances make Globant the AI-native orchestration partner that connects model providers, hyperscalers, and the enterprise.

Martín Migoya: Together, these alliances make Globant the AI-native orchestration partner that connects model providers, hyperscalers, and the enterprise. Finally, our AI-powered network, which elevates advertising, marketing strategy, and media, got kicked off the year with incredible momentum, adding 18 new client logos and delivering groundbreaking work. A surreal celebrity-driven music video which became a full-blown cultural event for Cheetos. The Stella Artois FIFA World Cup 2026 campaign featuring David Beckham in the US, a special project for Bancolombia, and Pura Magia, a new campaign in partnership with Disney, which reimagines the meaning of transformation at Walt Disney World. Q1 2026 delivered above the high end of our revenue guidance, advanced AI Pods into a clearly strategic position in our portfolio, and gave us additional evidence that the macro shift toward AI-native services is being underwritten by the most credible investors in the technology space.

Speaker #2: And finally, our AI-powered network, which elevates advertising, marketing strategy, and media. Gut kicked off the year with incredible momentum, adding 18 new client logos, and delivering groundbreaking work, a surreal celebrity-driven music video which became a full-blown cultural event for Cheetos.

Speaker #2: The Stella Artois FIFA World Cup 2026 campaign featuring David Beckham in the US, a special project for Ban Colombia, and Pura Magia, a new campaign in partnership with Disney, which reimagines the meaning of transformation at Walt Disney World.

Speaker #2: Q1 2026 delivered above the high end of our revenue guidance, advanced AI pods into a clearly strategic position in our portfolio. And gave us additional evidence that the macro shift toward AI-native services is being underwritten by the most credible investors in the technology space.

Speaker #2: In summary, we are reaffirming the midpoint of our full-year revenue outlook, which implies quarter-over-quarter improvement throughout the rest of the year, and also a strong focus on capital allocation and returns.

Martín Migoya: In summary, we are reaffirming the midpoint of our full year revenue outlook, which implies quarter-over-quarter improvement throughout the rest of the year, and also a strong focus on capital allocation and returns, and accelerating the highest margin product in our portfolio. We are confident in 2026. I want to thank our clients for their trust, our partners for their collaboration, and our Globers around the world for the work they do every day. With that, I will hand it over to Diego, our CTO, who will walk you through the technology and delivery layer. Thank you.

Speaker #2: And accelerating the highest margin product in our portfolio. We are confident in 2026. I want to thank our clients for their trust, our partners for their collaboration, and our Globers around the world for the work they do every day.

Speaker #2: With that, I will hand it over to Diego, our CTO, who will walk you through the technology and delivery layer. Thank you. Hello. Globant is no longer preparing for the AI era.

Diego Tartara: Hello. Globant is no longer preparing for the AI era. We are operating within it. We are systematically reinventing our delivery model so that every solution we deliver is secure, scalable, and AI-native from day one. This is what's driving the $352 million pipeline in AI Pods. The technology layer underneath is what makes this work, and that is where I want to focus today. We have evolved our signature delivery framework built on hundreds of autonomous units to embed AI into every dimension of execution. The three pillars of our delivery model have been overhauled to meet this moment. Our Globers are not just using AI, they are augmenting their technical domains to become multidisciplinary orchestrators. We are also expanding to new roles such as our forward deploy engineering team.

Diego Tártara: Hello. Globant is no longer preparing for the AI era. We are operating within it. We are systematically reinventing our delivery model so that every solution we deliver is secure, scalable, and AI-native from day one. This is what's driving the $352 million pipeline in AI Pods. The technology layer underneath is what makes this work, and that is where I want to focus today. We have evolved our signature delivery framework built on hundreds of autonomous units to embed AI into every dimension of execution. The three pillars of our delivery model have been overhauled to meet this moment. Our Globers are not just using AI, they are augmenting their technical domains to become multidisciplinary orchestrators. We are also expanding to new roles such as our forward deploy engineering team.

Speaker #2: We are operating within it. We are systematically reinventing our delivery model so that every solution we deliver is secure, scalable, and AI-native from day one.

Speaker #2: This is what's driving the 352 million dollar pipeline in AI pods, and the technology layer underneath is what makes this work, and that is where I want to focus today.

Speaker #2: We have evolved our signature delivery framework, built on hundreds of autonomous units, to embed AI into every dimension of execution. The three pillars of our delivery model have been overhauled to meet this moment.

Speaker #2: Our Globers are not just using AI; they are augmenting their technical domains to become multidisciplinary orchestrators. We are also expanding to new roles, such as our forward deploy engineering team.

Speaker #2: We have redefined project management with AI-powered observability and agentic workflows that drive measurable efficiency gains. AI readiness and accountability are now mandatory across all offerings, evolving our edge LDNA into a truly AI-native model.

Diego Tartara: We have redefined project management with AI-powered observability and agentic workflows that drive measurable efficiency gains. AI readiness and accountability are now mandatory across all offerings, evolving our agile DNA into a truly AI-native model. We are also building what we call our Agentic Economy, an inner source ecosystem of more than 20 validated cross-industry agentic solutions that we package as deployable assets directly into AI Pods engagements. Whether it is an IT root cause analysis tool for airlines or a supply chain agent for oil and gas, these assets are now being replicated across media, pharma, and tech in weeks rather than months. We put special focus on the major demand pools that Martin mentioned: AI delivery, modernization, and technical debt. Our Forward Deployed Engineers are prototyping these solutions in 14 to 21 days.

Diego Tártara: We have redefined project management with AI-powered observability and agentic workflows that drive measurable efficiency gains. AI readiness and accountability are now mandatory across all offerings, evolving our agile DNA into a truly AI-native model. We are also building what we call our Agentic Economy, an inner source ecosystem of more than 20 validated cross-industry agentic solutions that we package as deployable assets directly into AI Pods engagements. Whether it is an IT root cause analysis tool for airlines or a supply chain agent for oil and gas, these assets are now being replicated across media, pharma, and tech in weeks rather than months. We put special focus on the major demand pools that Martin mentioned: AI delivery, modernization, and technical debt. Our Forward Deployed Engineers are prototyping these solutions in 14 to 21 days.

Speaker #2: We are also building what we call our agentic economy, an inner-source ecosystem of more than 20 validated cross-industry agentic solutions that we package as deployable assets directly into AI Pods engagements.

Speaker #2: Whether it is an IT root cause analysis tool for airlines, or a supply chain agent for oil and gas, these assets are now being replicated across media, pharma, and tech in weeks rather than months.

Speaker #2: We put special focus on the major demand pools that Martin mentioned: AI delivery, modernization, and technical debt. Our forward deploy engineers are prototyping these solutions in 14 to 21 days.

Speaker #2: This is the practical mechanism that lets Globant participate in what Sequoia and others have called the 'services as the new software' era. We are building compounding IP that generates recurring value and positions us as a long-term strategic partner.

Diego Tartara: This is the practical mechanism that lets Globant participate in what Sequoia and others have called the services as the new software era. We are building compounding IP that generates recurring value and positions us as a long-term strategic partner. AI Pods are how that IP gets monetized. As we approach the 2026 World Cup, our work with FIFA is accelerating. AI agent networks with human supervision will power key FIFA platforms, enabling more consistent fan engagement across competitions, smarter activation of partnerships, and faster deployment of new digital experiences. In Latin American football, Deportivo Toluca, the current Liga MX champion, has launched a new engagement platform developed by Globant and our sports products division, Sportian. The platform offers supporters live in-match services, ticketing, e-commerce, statistics, and exclusive content, helping the club personalize the fan experience.

Diego Tártara: This is the practical mechanism that lets Globant participate in what Sequoia and others have called the services as the new software era. We are building compounding IP that generates recurring value and positions us as a long-term strategic partner. AI Pods are how that IP gets monetized. As we approach the 2026 World Cup, our work with FIFA is accelerating. AI agent networks with human supervision will power key FIFA platforms, enabling more consistent fan engagement across competitions, smarter activation of partnerships, and faster deployment of new digital experiences. In Latin American football, Deportivo Toluca, the current Liga MX champion, has launched a new engagement platform developed by Globant and our sports products division, Sportian. The platform offers supporters live in-match services, ticketing, e-commerce, statistics, and exclusive content, helping the club personalize the fan experience.

Speaker #2: AI pods are how that IP gets monetized. As we approach the 2026 World Cup, our work with FIFA is accelerating. AI agent networks with human supervision will power key FIFA platforms, enabling more consistent fan engagement across competitions, smarter activation of partnerships, and faster deployment of new digital experiences.

Speaker #2: In Latin American football, Deportivo Toluca, the current Liga MX champion, has launched a new engagement platform developed by Globant and our sports products division, Sportien.

Speaker #2: The platform offers supporters live in-match services, ticketing, e-commerce, statistics, and exclusive content, helping the club personalize the fan experience. In consumer goods, we are working with Grupo Mariposa, one of the region's leading CPG companies, to transform their marketing model around the consumer.

Diego Tartara: In consumer goods, we are working with Grupo Mariposa, one of the region's leading CPG companies, to transform their marketing model around the consumer. The initiative integrates data, AI, MarTech, and agile methodologies to enable smarter, faster, more precise decisions. Marketing evolves into a continuously learning system in which creativity and technology adapt together to consumer behavior. Globant is supporting CMPC, a global leader in sustainable pulp and paper, to deploy an AI-powered solution that enhances supply chain traceability and compliance, end-to-end visibility, regulatory adherence, and a clear sustainability narrative. Our ecosystem continued to deepen in Q1. We announced a strategic partnership with Adyen for next-generation merchant payment experiences. We obtained the Gen AI Competency from AWS and achieved expert status for SAP Business Data Cloud specialization. Our collaboration with Adobe expanded as we became the first customer experience orchestration partner in LATAM.

Diego Tártara: In consumer goods, we are working with Grupo Mariposa, one of the region's leading CPG companies, to transform their marketing model around the consumer. The initiative integrates data, AI, MarTech, and agile methodologies to enable smarter, faster, more precise decisions. Marketing evolves into a continuously learning system in which creativity and technology adapt together to consumer behavior. Globant is supporting CMPC, a global leader in sustainable pulp and paper, to deploy an AI-powered solution that enhances supply chain traceability and compliance, end-to-end visibility, regulatory adherence, and a clear sustainability narrative. Our ecosystem continued to deepen in Q1. We announced a strategic partnership with Adyen for next-generation merchant payment experiences. We obtained the Gen AI Competency from AWS and achieved expert status for SAP Business Data Cloud specialization. Our collaboration with Adobe expanded as we became the first customer experience orchestration partner in LATAM.

Speaker #2: The initiative integrates data, AI, MarTech, and agile for faster, more precise decisions. Marketing evolves into a continuously learning system in which creativity and technology adapt together to consumer behavior.

Speaker #2: Globant is supporting CMPC, a global leader in sustainable pulp and paper, to deploy an AI-powered solution that enhances supply chain traceability and compliance. End-to-end visibility regulatory adherence and a clear sustainability narrative.

Speaker #2: Our ecosystem continued to deepen in Q1. We announced a strategic partnership with Adyen for next-generation merchant payment experiences. We obtained the Gen AI competency from AWS and achieved expert status for SAP Business Data Cloud specialization.

Speaker #2: Our collaboration with Adobe expanded as we became the first customer experience orchestration partner in LATAM. Our partnership with Autodesk now includes integration with Tandem Digital Twin technology, unlocking new efficiencies in design and operations.

Diego Tartara: Our partnership with Autodesk now includes integration with Tandem digital twin technology, unlocking new efficiencies in design and operations. Combined with the partnership recognitions Martin shared earlier, this reinforces our position as the AI-native delivery layer. In Q1, we published two new reports through our research arm, one guiding financial institutions on adopting real-time AI-driven operations, and another helping airlines transition to modern retail models. Both are available at reports.globant.com. Our role in this market is straightforward. We turn AI from a tool into a delivery model, and we package the IP we generate into assets that our clients can deploy. The technology layer behind AI Pods is now compounding, and that is what gives us conviction in the trajectory Martin described today. With that in mind, I will now turn it over to Juan. Thank you very much.

Diego Tártara: Our partnership with Autodesk now includes integration with Tandem digital twin technology, unlocking new efficiencies in design and operations. Combined with the partnership recognitions Martin shared earlier, this reinforces our position as the AI-native delivery layer. In Q1, we published two new reports through our research arm, one guiding financial institutions on adopting real-time AI-driven operations, and another helping airlines transition to modern retail models. Both are available at reports.globant.com. Our role in this market is straightforward. We turn AI from a tool into a delivery model, and we package the IP we generate into assets that our clients can deploy. The technology layer behind AI Pods is now compounding, and that is what gives us conviction in the trajectory Martin described today. With that in mind, I will now turn it over to Juan. Thank you very much.

Speaker #2: Combined with the partnership recognitions Martin shared earlier, this reinforces our position as the AI-native delivery layer. In Q1, we published two new reports through our research arm: one guiding financial institutions on adopting real-time, AI-driven operations, and another helping airlines transition to modern retail models.

Speaker #2: Both are available at reports.globant.com. Our role in this market is straightforward. We turn AI from a tool into a delivery model, and we package the IP we generate into assets that our clients can deploy.

Speaker #2: The technology layer behind AI pods is now compounding, and that is what gives us conviction in the trajectory Martin described today. With that in mind, I will now turn it over to Juan.

Speaker #2: Thank you very much.

Speaker #3: Hello, and good afternoon, everyone. I am pleased to discuss our results for the first quarter of 2026. We have begun the year with a focus on stability and execution.

Juan Urthiague: Hello, and good afternoon, everyone. I am pleased to discuss our results for Q1 2026. We have begun the year with a focus on stability and execution.

Speaker #3: We are operating in a discerning client environment, and we are seeing buyers concentrating on high-impact, agentic AI projects and digital transformation, which is exactly where we are positioned.

Juan Urthiague: We are operating in a discerning client environment, and we are seeing buyers concentrating on high-impact agentic AI projects and digital transformation, which is exactly where we are positioned. We are executing on the financial front, protecting the bottom line, improving working capital, increasing CapEx efficiency, and repurchasing our shares. In Q1, our revenue stood at $607.1 million, representing a 0.7% decrease on a reported basis, coming in above the high end of our guidance and reflecting a 400 basis point improvement in year-over-year trajectory compared to last quarter. Q1 revenues included 200 basis points of FX tailwind. The improvement is most visible in our top accounts. Our top 50 clients grew 5.2% year-over-year.

Speaker #3: We are executing on the financial front, protecting the bottom line, improving working capital, increasing CapEx efficiency, and repurchasing our shares. In the first quarter, our revenue stood at $607.1 million, representing a 0.7% decrease on a reported basis, coming in above the high end of our guidance and reflecting a 400 basis point improvement in year-over-year trajectory compared to last quarter.

Speaker #3: Q1 revenues included 200 basis points of FX tailwind. The improvement is most visible in our top accounts: our top 50 clients grew 5.2% year-over-year, our top 10 grew 4%, and our 2 to 5 cohort grew 8.2%, all materially above the company average.

Juan Urthiague: Our top 10 grew 4%, and our 2 to 5 cohort grew 8.2%, all materially above the company average. Many of our top 20 clients returned to positive year-over-year growth this quarter. This is aligned with our 100 squared strategy. Our revenue per employee also increased again this quarter, driven by our pivot into platform and AI-led delivery, which allows us to maintain our revenues with a slightly lower head count. Our adjusted gross profit margin for the quarter was 37%. Gross margins continue to be impacted by the relative strength of LATAM currencies, primarily the Mexican peso, the Colombian peso, and the Brazilian real compared to the prior year, alongside statutory cost increases in our delivery centers.

Speaker #3: Many of our top 20 clients returned to positive year-over-year growth this quarter. This is aligned with our 100 Squared strategy. Our revenue per employee also increased again this quarter, driven by our pivot into platform and AI-led delivery.

Speaker #3: This allows us to maintain our revenues with a slightly lower headcount. Our adjusted gross profit margin for the quarter was 37%. Gross margins continue to be impacted by the relative strength of LATAM currencies—primarily the Mexican peso, the Colombian peso, and the Brazilian real—compared to the prior year, alongside statutory cost increases in our delivery centers.

Speaker #3: Over time, as AI Pods grow as a share of our revenue mix, their structurally higher margin profile can begin to contribute to our blended company margins.

Juan Urthiague: Over time, as AI Pods grow as a share of our revenue mix, their structurally higher margin profile can begin to contribute to our blended company margins. This is the longer-term margin opportunity we are building toward. Our adjusted operating margin came in at 14.1% for the quarter, with SG&A at 18.5% of revenues. The effective tax rate for the quarter stood at 23.5% within our guided range. Our adjusted net income for the quarter was $65.2 million, representing an adjusted net income margin of 10.7%. Q1 adjusted diluted EPS came in at $1.50 above the midpoint of our guidance. This number absorbed meaningful FX headwinds, primarily from the Mexican peso, the Colombian peso, and the Brazilian real. On an FX neutral basis, adjusted EPS would have been higher.

Speaker #3: This is the longer-term margin opportunity we are building toward. Our adjusted operating margin came in at 14.1% for the quarter, with SG and A at 18.5% of revenues.

Speaker #3: The effective tax rate for the quarter stood at 23.5% within our guided range. Our adjusted net income for the quarter was 65.2 million dollars.

Speaker #3: Representing an adjusted net income margin of 10.7%. Q1 adjusted diluted EPS came in at $1.50, above the midpoint of our guidance. This number absorbed meaningful FX headwinds.

Speaker #3: Primarily from the Mexican peso, the Colombian peso, and the Brazilian real. On an FX-neutral basis, adjusted EPS would have been higher. The underlying operating performance was consistent with our internal plan.

Juan Urthiague: The underlying operating performance was consistent with our internal plan. Our balance sheet remains strong, ending the quarter with $200.5 million in cash and short-term investments or $161.2 million in net debt. During Q1, we invested $50 million to repurchase shares as per the plan announced in October 2025. Our original share repurchase program was completed during Q2. In Q1 2026, we generated $36.1 million of free cash flow, achieving a free cash flow to adjusted net income ratio exceeding 55% compared to -$5.7 million of free cash flow in Q1 2025. This is the first time Globant has generated free cash flow in Q1 since 2019. We expect to continue generating strong organic free cash flow for the full year 2026.

Speaker #3: Our balance sheet remains strong, ending the quarter with $200.5 million in cash and short-term investments, or $161.2 million in net debt. During the first quarter, we invested $50 million to repurchase shares as per the plan announced in October 2025.

Speaker #3: Our original share repurchase program was completed during Q2. In Q1 2026, we generated 36.1 million dollars of free cash flow, achieving a free cash flow to adjusted net income ratio exceeding 55% compared to negative 5.7 million dollars of free cash flow in Q1 2025.

Speaker #3: This is the first time Globant has generated free cash flow in the first quarter since 2019. We expect to continue generating strong organic free cash flow for the full year 2026.

Speaker #3: We will continue to allocate capital with discipline across two priorities: returning capital to shareholders through the newly authorized repurchase program, and investing in high-return growth initiatives, principally the continued build-out of our AI pods business.

Juan Urthiague: We will continue to allocate capital with discipline across two priorities: returning capital to shareholders through the newly authorized repurchase program and investing in high-return growth initiatives, principally the continued build-out of our AI Pods business. Now let me move to our outlook for Q2 and for the remainder of the year. For Q2 2026, based on current visibility, we expect revenue to be between $610 million and $616 million. The Q2 year-over-year guidance implies, at the midpoint, a positive FX tailwind of 100 basis points. We expect a non-IFRS adjusted operating margin between 14% and 15%, and the IFRS effective income tax rate is expected to be in the 22% to 24% range.

Speaker #3: Now let me move to our outlook for Q2 and for the remainder of the year. For the second quarter of 2026, based on current visibility, we expect revenue to be between 610 million dollars and 616 million dollars.

Speaker #3: The Q2 year-over-year guidance implies at the midpoint a positive FX tailwind of 100 basis points, we expect a non-IFRS adjusted operating margin between 14% and 15%, and the IFRS effective income tax rate is expected to be in the 22% to 24% range.

Speaker #3: Non-IFRS adjusted diluted EPS is expected to be between $1.45 and $1.55 per share, assuming an average of 43.6 million diluted shares outstanding during the second quarter.

Juan Urthiague: Non-IFRS adjusted diluted EPS is expected to be between $1.45 and $1.55 per share, assuming an average of 43.6 million diluted shares outstanding during Q2. With respect to the full year, at the midpoint, we are maintaining our 2026 revenue guidance unchanged. We expect revenues in the range of $2,462 million to 2,508 million, implying 0.3% to 2.2% year-over-year growth with approximately 100 basis points of FX tailwind. Both Q2 and subsequent quarters imply sequential growth and a healthy exit rate more aligned with industry growth averages. In terms of profitability, we continue to expect our adjusted operating margin for the full year to be between 14% and 15%.

Speaker #3: With respect to the full year, at the midpoint we are maintaining our 2026 revenue guidance unchanged, we expect revenues in the range of $2,462 million dollars to $2,508 million dollars.

Speaker #3: Implying 0.3% to 2.2% year-over-year growth. With approximately 100 basis points of FX tailwind. Both Q2 and subsequent quarters imply sequential growth and a healthy exit rate more aligned with industry growth averages.

Speaker #3: In terms of profitability, we continue to expect our adjusted operating margin for the full year to be between 14% and 15%. Our margins continue to be pressured by the strength of LATAM currencies, relative to the dollar.

Juan Urthiague: Our margins continue to be pressured by the strength of LATAM currencies relative to the dollar. The IFRS effective income tax rate is expected to be in the 21% to 23% range. For the full year, we are also reiterating an adjusted diluted EPS range of $6.10 to 6.50, assuming an average of 44.1 million diluted shares outstanding for the full year. To conclude, Q1 was a quarter of steady execution. We are seeing improvements across our top clients. We are executing on the things that we can control, and our balance sheet remains a source of strength. Our focus on embedding AI into the core of our value proposition is clearly resonating with our most strategic partners. Thank you for your continued support.

Speaker #3: The IFRS effective income tax rate is expected to be in the 21% to 23% range. For the full year, we are also reiterating an adjusted diluted EPS range of $6.10 to $6.50, assuming an average of 44.1 million diluted shares outstanding for the full year.

Speaker #3: To conclude, Q1 was a quarter of steady execution. We are seeing improvements across our top clients. We are executing on the things that we can control, and our balance sheet remains a source of strength.

Speaker #3: Our focus on embedding AI into the core of our value proposition is clearly resonating with our most strategic partners. Thank you for your continued support.

Speaker #3: Thank you, Juan, and hi everyone. So as we go through the Q&A section of the call, I will first announce your name. And at that point, please unmute your line and ask your question.

Arturo Langa: Thank you, Juan. Hi, everyone. As we go through the Q&A section of the call, I will first announce your name, and at that point, please unmute your line and ask your question. I will also ask you to please limit your time to one question and one follow-up. With that in mind, we will take the first question from the line of Brian Bergen from TD Cowen. Brian, please go ahead.

Speaker #3: I will also ask you to please limit your time to one question, and one follow-up. So, with that in mind, we will take the first question from the line of Brian Bergen from TD Cowen.

Speaker #3: Brian, please go ahead.

Speaker #4: Hey guys, good afternoon, good evening. Thank you. Maybe my first one, just as it relates to demand conversion. Can you just talk about what you've been seeing in the broader conversation?

Brian Bergen: Hey, guys. Good afternoon, good evening. Thank you. Maybe my first one, just as it relates to demand conversion, can you just talk about what you've been seeing in the broader conversation? It's good to hear the traction on the AI Pods, but when you just think about the broader conversation, have you seen anything shifting in more recent weeks, you know, April and May? How has that compared to Q1 as it relates to pipeline conversion?

Brian Bergin: Hey, guys. Good afternoon, good evening. Thank you. Maybe my first one, just as it relates to demand conversion, can you just talk about what you've been seeing in the broader conversation? It's good to hear the traction on the AI Pods, but when you just think about the broader conversation, have you seen anything shifting in more recent weeks, you know, April and May? How has that compared to Q1 as it relates to pipeline conversion?

Speaker #4: So it's good to hear the traction on the AI pods, but when you just think about the broader conversation, have you seen anything shifting in more recent weeks, you know, April and May?

Speaker #4: How is that compared to the first quarter as it relates to pipeline conversion?

Speaker #3: Yeah, the pipeline remains a hi, how are you? Sorry. The pipeline remains in a very healthy state. Conversion is quite good. We're seeing large deals that we have been closing during last year, and also closing during this first quarter that will gain traction moving forward.

Martín Migoya: Yeah, the pipeline remains. Hi, how are you? Sorry. The pipeline remains in a very healthy state. Conversion is quite good. We're seeing large deals that we have been closing during last year and also closing during this Q1 that will gain traction moving forward. It's configuring like a space in which we'll have, like, several, you know, big deals starting to yield some results moving forward, and we're very happy for that. Of course, there's some concerns around what's happening on the Middle East. However, we see the business healthy there. We have, you know, some concerns around airlines and the amount of the price of the fuel that is kind of changing the landscape for some trips.

Speaker #3: So with configuring like a space in which we'll have like several big deals starting to yield some results moving forward, and we're very happy for that.

Speaker #3: Of course, there are some concerns around what's happening on the Middle East. However, we see the business healthy there. We have, you know, some concerns around airlines and the amount of the price of the fuel that is kind of changing the landscape.

Speaker #3: For some trips, but in general, we see a quite positive environment in terms of bookings. Long-term deals, which are extremely important, that are coming back and gaining traction.

Martín Migoya: In general, we see a quite positive, a quite positive environment in terms of bookings. Long-term deals, which are extremely important, that are coming back and gaining traction. You know, one remarkable thing that I would like to mention is that the growth on the main accounts is way above what we are seeing in the full company, right? This is kind of the result of the focus we're having on the 100 squared accounts and the focus that we're getting on those large customers that are needing more than ever. When we talk about AI Pods, we're talking about a way to deliver the traditional services. We're not talking about a specific offer, but we're talking about the broader conversation, too, and a new way of delivering that broader conversation in a way which is AI native.

Speaker #3: And, you know, one remarkable thing that I would like to mention is that the growth on the main accounts is way above what we are seeing in the full company, right?

Speaker #3: So this is kind of the result of the focus we're having on the 100 square accounts and the focus that we're getting on those large customers that are needing more than ever when we talk about AI pods, we're talking about a way to deliver the traditional services.

Speaker #3: We're not talking about a specific offer, but we're talking about the broader conversation too. And a new way of delivering that broader conversation in a way which is AI native.

Speaker #3: So I cannot split the conversation from the AI pods from the broader conversation. But yes, I can say that in general terms, conversations are going in the right direction.

Martín Migoya: I cannot split the conversation from the AI Pods from the broader conversation. Yes, I can say that in general terms, conversations are going in the right direction.

Speaker #4: Okay, okay, that's clear. And then maybe on the margin, Juan, can you quantify just how much FX pressure there is within the gross margin in the first quarter and in your outlook for this year?

Brian Bergen: Okay. Okay, that's clear. Maybe on the margin, Juan, can you quantify just how much FX pressure there is within the gross margin?

Brian Bergin: Okay. Okay, that's clear. Maybe on the margin, Juan, can you quantify just how much FX pressure there is within the gross margin?

Martín Migoya: Yeah

Juan Urthiague: Yeah

Brian Bergen: in the Q1 and in your outlook for this year? In gross margin assumption for the year, are you including any tailwind from these from the AI pod structures?

Brian Bergin: in the Q1 and in your outlook for this year? In gross margin assumption for the year, are you including any tailwind from these from the AI pod structures?

Speaker #4: And in gross margin assumption for the year, are you including any tailwind from the AI pod structures?

Speaker #3: Sure. So in the first quarter, you know, compared to the last quarter, we see about 1 percentage point of FX headwind. Coming from mainly, you know, Colombia, Brazil, a little bit in Mexico, in terms of for the rest of the year, you know, so far, the assumption is the same.

Martín Migoya: Sure. So, in Q1, you know, compared to the last quarter, we see about 1 percentage point of FX headwind coming from mainly, you know, Colombia, Brazil, a little bit in Mexico. In terms of for the rest of the year, you know, so far the assumption is the same. I mean, we cannot predict what's gonna happen in terms of FX, but we will definitely work, you know, to be as efficient as possible, you know, to increase utilization levels as different ways to offset part of that. We do have very little positive impact being assumed toward the last part of the year.

Juan Urthiague: Sure. So, in Q1, you know, compared to the last quarter, we see about 1 percentage point of FX headwind coming from mainly, you know, Colombia, Brazil, a little bit in Mexico. In terms of for the rest of the year, you know, so far the assumption is the same. I mean, we cannot predict what's gonna happen in terms of FX, but we will definitely work, you know, to be as efficient as possible, you know, to increase utilization levels as different ways to offset part of that. We do have very little positive impact being assumed toward the last part of the year.

Speaker #3: I mean, we cannot predict what's going to happen in terms of effects, but we will definitely work, you know, to be as efficient as possible, you know, to increase utilization levels as different ways to offset part of that.

Speaker #3: And we do have very little positive impact being assumed toward the last part of the year. As you know, you know, last quarter, we mentioned a run rate, an expected run rate of 60 to 100 million dollars of AI pods.

Martín Migoya: As you know, you know, last quarter we mentioned, you know, a run rate, an expected run rate of $60 to 100 million of AI Pods, and that's gonna be towards the end of the year. Even though it's growing very fast, it is still a small part of our business. What is more interesting is that if this continues to scale the way it is scaling, you know, it's a good place to be looking into the future, right? Because this model is proving to be with better margins overall relative to the, to the rest of our business or to the rest of the delivery models.

Juan Urthiague: As you know, you know, last quarter we mentioned, you know, a run rate, an expected run rate of $60 to 100 million of AI Pods, and that's gonna be towards the end of the year. Even though it's growing very fast, it is still a small part of our business. What is more interesting is that if this continues to scale the way it is scaling, you know, it's a good place to be looking into the future, right? Because this model is proving to be with better margins overall relative to the, to the rest of our business or to the rest of the delivery models.

Speaker #3: And that's going to be towards the end of the year. So even though it's growing very fast, it is still a small part of our business, but what is more interesting is that this continues to scale the way it is scaling.

Speaker #3: You know, it's a good place to be looking into the future, right? Because these models are proving to be with better margins overall relative to the rest of our business.

Speaker #3: Or to the rest of the delivery models.

Speaker #4: Thank you.

Brian Bergen: Thank you.

Brian Bergin: Thank you.

Speaker #5: Thank you very much.

Martín Migoya: Thank you very much.

Speaker #2: Thank you, Brian. The next question comes from the line of Maggie Nolan from William Blair. Maggie, please go ahead.

Arturo Langa: Thanks, Brian. The next question comes from the line of Maggie Nolan from William Blair. Maggie, please go ahead.

Speaker #6: Hi, thank you. Maybe to follow up on what Brian was just talking about, the AI pod margins obviously quite strong. Do you expect that to be sustainable into the future, or what are your expectations for competitive pricing pressure there?

Maggie Nolan: Hi. Thank you. Maybe to follow up on what Bryan was just talking about, the AI Pods margin's obviously quite strong. Do you expect that to be sustainable into the future, or what are your expectations for competitive pricing pressure there?

Speaker #3: Yeah, yeah, I mean, as always, I mean, there is competition, but at the same time, you know, we see that as we scale projects with AI pods, you know, we improve significantly our agents.

Martín Migoya: Yeah. Yeah, I mean, as always, I mean, there is competition, but at the same time, you know, we see that, as we, as we scale, projects, with AI Pods, you know, we improve significantly our agents. We improve how we use the different models and the tokens. And also, you know, they get more efficient because the agents that we build, you know, as they learn, as they evolve in the project, you know, they get more efficient as well. I think that's gonna take us or that's gonna help us offset whatever pressure might come from other places. The expectation for us is that the AI Pod delivery model will overall deliver higher margins than the other, you know, more traditional ways of delivering.

Juan Urthiague: Yeah. Yeah, I mean, as always, I mean, there is competition, but at the same time, you know, we see that, as we, as we scale, projects, with AI Pods, you know, we improve significantly our agents. We improve how we use the different models and the tokens. And also, you know, they get more efficient because the agents that we build, you know, as they learn, as they evolve in the project, you know, they get more efficient as well. I think that's gonna take us or that's gonna help us offset whatever pressure might come from other places. The expectation for us is that the AI Pod delivery model will overall deliver higher margins than the other, you know, more traditional ways of delivering.

Speaker #3: We improve how we use the different models and the tokens. And also, you know, they get more efficient because the agents that we build, you know, as they learn, as they evolve in the project, you know, they get more efficient as well.

Speaker #3: So I think that that's going to take us, or that's going to help us offset whatever pressure might come from other places. So the expectation for us is that the AI pod delivery model will overall deliver higher margins than the other more traditional ways of delivery.

Speaker #5: We are in a trend of growing revenue per head for many, many years already, right? So this is constantly reflecting the way we understand how to scale our business, you know, always looking for margin or looking for new practices and innovation and customers are reacting quite well to that as the numbers demonstrate.

Martín Migoya: I think that we are in a trend of growing revenue per head for many, many years already, right. This is constantly reflecting the way we understand how to scale our business, you know, always looking for margin or looking for new practices and innovation, and customers are reacting quite well to that as the numbers demonstrate.

Speaker #6: Martine, maybe to build on that revenue per head comment, I would imagine that the four deployed engineers are contributing to that growth as well.

Maggie Nolan: Martin, maybe to build on that revenue per head comment, I would imagine that the Forward Deployed Engineers are contributing to that growth as well. Maybe you could just comment on how those capabilities differ from your historical workforce and what additional changes do you need to make to the workforce to continue to capture market share?

Speaker #6: And maybe you could just comment on how those capabilities differ from your historical workforce, and what additional changes do you need to make to the workforce to continue to capture market share?

Speaker #3: Yeah, I will answer the first part. The second one, it will be on Diego. The four deployed engineers is something that we have been doing for many, many years.

Martín Migoya: Yeah, I will answer the first part. The second one will be on Diego. The Forward Deployed Engineers is something that we have been doing for many, many years. We didn't call it that way, but our engineers working at our customer's premises and understanding the processes and trying to propose like new ways of doing things. Now they became like agents of transformation. Instead of using just one platform, they can use pretty much any platform. They are being very welcome within our customers and this is something we have been doing forever. Now I think the next generation of, you know, understanding or knowledge has to do with changing full processes.

Speaker #3: We didn't call it that way, but our engineers are working at our customers' premises, understanding the processes, and trying to propose new ways of doing things.

Speaker #3: And now they became like agents of transformation but instead of using just one platform, they can use pretty much any platform. And so they are being very welcome within our customers.

Speaker #3: And this is something we have been doing forever. And now, I think the next generation of, you know, understanding or knowledge has to do with changing full processes.

Speaker #3: I mean, processes that before were impossible to change, now it's possible to automate, or at least thinking in the totally different manner. And that kind of mindset is the mindset that we are embedding and putting into our teams in front of our customers or forward deployed engineers in front of our customers.

Martín Migoya: I mean, processes that before were impossible to change, now it's possible to automate or at least think it in a totally different manner. That kind of mindset is the mindset that if we are embedding and putting into, you know, our teams in front of our customers or Forward Deployed Engineers in front of our customers. I don't know, Diego, if you want to complete.

Speaker #3: I don't know, Diego, if you want to complete.

Speaker #2: No, I think Martine captured pretty well the whole idea. So Maggie, just to give you an idea and a similarity, this is the actual version of what an enterprise architect used to be.

Diego Tartara: I think Martín capture pretty well the whole idea. Maggie, just to give you an idea and a similarity, this is the actual version of what an enterprise architect used to be. The thing is, they're called Deploy because now there's a platform involved that you need to deploy and then implement. Implementation is exactly what Martín said, which is, having knowledge on, you know, how to map the company's data structure, architecture, different components, connect that and build and create the platform for building the solutions on top of that. It's that typically accounts for, you know, the top-notch engineers, the most senior tier of engineers, and like you said, they tend to contribute to that revenue per head uplift.

Diego Tártara: I think Martín capture pretty well the whole idea. Maggie, just to give you an idea and a similarity, this is the actual version of what an enterprise architect used to be. The thing is, they're called Deploy because now there's a platform involved that you need to deploy and then implement. Implementation is exactly what Martín said, which is, having knowledge on, you know, how to map the company's data structure, architecture, different components, connect that and build and create the platform for building the solutions on top of that. It's that typically accounts for, you know, the top-notch engineers, the most senior tier of engineers, and like you said, they tend to contribute to that revenue per head uplift.

Speaker #2: The thing is, they're called deploy because now there's a platform involved that you need to deploy. And then implement. And implementation is exactly what Martine said.

Speaker #2: Which is having knowledge on, you know, how to map the company's data structure, architecture, different components, connect that, and build and create the platform for building the solutions on top of that.

Speaker #2: So it's that that typically accounts for, you know, the top-notch engineers, the most senior tier of engineers. And, like you said, they tend to contribute to that revenue per head uplift.

Speaker #6: Great. Thank you.

Maggie Nolan: Great. Thank you.

Speaker #2: Sure.

Diego Tartara: Sure.

Diego Tártara: Sure.

Speaker #5: Welcome, Maggie.

Martín Migoya: Welcome, Maggie.

Speaker #2: Thank you, Maggie. Next up is Tianxin Huang from JPMorgan. Tianxin, your line is open.

Arturo Langa: Thank you, Maggie. Next up is Tien-Tsin Huang from JP Morgan. Tien-Tsin, your line is open.

Speaker #4: Hey, thank you, Arturo. Thanks. Nice to see everybody. Martin, I liked your comments in the prepared remarks about the rewiring of the industry and things like that.

Tien-Tsin Huang: Hey, thank you, Arturo. Thanks. Nice to see everybody. Martín, I liked your comments on the, in the prepared remarks about the rewiring of the industry and things like that. I am just curious just to focus on that with these LLMs investing in services, how do you see the competitive landscape changing? I know we've seen this a little bit before in software and enterprise software. Do you see it differently here? You know, it is a validation of services, of course, but not sure exactly what their long-term intent without domain knowledge can be like what Globalbot has. How do you see the, you know, the competitive dynamics evolving here?

Speaker #4: So I'm just curious, just to focus on that with these LLMs investing in services, how do you see the competitive landscape changing? I know we've seen this a little bit before in software and enterprise software.

Speaker #4: Do you see it differently here? You know, it is a validation of services, of course, but I'm not sure exactly what their long-term intent is without domain knowledge, like what Globant has.

Speaker #4: So how do you see the, you know, the competitive dynamics evolving here?

Speaker #1: That's a great question, Tianxin. Great to see you back.

Martín Migoya: That's a great question, TsinHsin. Great to see you back.

Speaker #4: Yeah, great to see you guys.

Tien-Tsin Huang: Yeah, great to see you guys.

Speaker #1: So first, I believe that the massive change that is happening, and the things that must be done moving forward, are so large. But so large.

Martín Migoya: First, I believe that the massive change that is happening and the things that must be done moving forward are so large, but so large that there's no way that all those things can be captured by just one or two companies, which by the way, wouldn't be independent. I think the value of being an independent company, the value of being able to create and facilitate. Can you hear me?

Speaker #1: That there's no way that all those things can be captured by just one or two companies. Which, by the way, wouldn't be independent. So I think the value of being an independent company.

Speaker #1: The value of being able to create and facilitate can you hear me? Okay, sorry. Microphone got off. So the value of. You know, and saving the tokens that the customers are producing the value of advising your customer or re-engineering the processes without any bias and being able to use the best possible technology.

Tien-Tsin Huang: Yes.

Martín Migoya: Okay. Sorry. Microphone. The value of creating, you know, and saving the tokens that the customers are producing, the value of advising your customer are re-engineering the processes without any bias and being able to use the best possible technology, is still there. I would like to say that I've been in this business for many, many years, and we have seen many times in which companies are moving back to services, from product to services. I believe this is a huge stamp of approval that we have been talking about that for the last 2 years. I mean, the big price is deploy. It's not just a model. We are playing the game of deploying it.

Speaker #1: It's still there. So I know I would like to say that I've been in this business for many, many years. And we have seen many times in which companies are moving back to services from product to services.

Speaker #1: And I believe this is a huge stamp of approval that we have been talking about that for the last two years. I mean, the big price is deploy.

Speaker #1: It's not just the model, and we are playing the game of deploying it. Our relationships with our customers—and the trust, confidence, and level of innovation—is absolutely there.

Martín Migoya: Our relationships with our customers and trust and confidence and level of innovation is absolutely there. I see this as a very exciting news. I don't know, Diego, if you want to-

Speaker #1: So, I see this as very exciting news. So, I don't know, Diego, if you want to.

Speaker #2: I want to make a little comment. We are actually in conversations with our partners. The same companies that are putting together their services. I mean, are in conversations with that.

Diego Tartara: Yeah. I wanna make a little comment. We're actually in conversations with our partners. The same companies that are putting together their services are in conversations with that. This is actually the model that the industry has been having for 20 years. It's what Amazon does, it's what Google does. They all have services capabilities, Microsoft as well. That's the excuse to capture business and route it to the partner network. A ton of the work that we do for AWS, as an example, comes from AWS themselves. This is actually a very simple. That's why their team is actually so small in scale.

Diego Tártara: Yeah. I wanna make a little comment. We're actually in conversations with our partners. The same companies that are putting together their services are in conversations with that. This is actually the model that the industry has been having for 20 years. It's what Amazon does, it's what Google does. They all have services capabilities, Microsoft as well. That's the excuse to capture business and route it to the partner network. A ton of the work that we do for AWS, as an example, comes from AWS themselves. This is actually a very simple. That's why their team is actually so small in scale.

Speaker #2: And this is actually the model that the industry has been having for 20 years. It's what Amazon does. It's what Google does. They all have services capabilities.

Speaker #2: Microsoft as well. And that's the excuse to capture business and route it to the partners' network. So a ton of the work that we do for AWS, as an example, comes from AWS themselves.

Speaker #2: So this is actually a very simple and that's why their team is actually so small in scale. So the idea is that the measure lift of this type of work should be done through their partner networks.

Diego Tartara: The idea is the major lift of this type of work should be done through their partner networks, but they need to be able to capture. If they don't provide services, they are not a go-to person for capturing that.

Diego Tártara: The idea is the major lift of this type of work should be done through their partner networks, but they need to be able to capture. If they don't provide services, they are not a go-to person for capturing that.

Speaker #2: But they need to be able to capture. If they don't provide services, they are not a go-to person for capturing that.

Speaker #1: That's a full demonstration of what we do. 100%.

Fernando Matzkin: That's a full demonstration of what we do, 100%.

Speaker #2: Yeah.

Diego Tartara: Yeah.

Diego Tártara: Yeah.

Speaker #4: Yeah, no, I'm glad you guys answered that way. It feels like a validation and, you know, I think the market hopefully will appreciate that.

Tien-Tsin Huang: No, I'm glad you guys answered that way. It feels like a validation, you know, I think the market hopefully will appreciate that. Maybe just my quick follow-up, just to ask a model question for you, Juan. Just thinking about, I think you talked about it earlier to Brian's question, but just thinking about Q1 being the trough, Q2 seeing a little bit of sequential growth, should we continue to assume it builds from there based on the backlog of work and what you expect in terms of closed sales? I mean, should we walk into faster accelerating growth and then we exit Q4 a little bit faster, assuming there are no other surprises from the macro?

Speaker #4: Maybe just my quick follow-up just to ask a model question for you, Juan. Just thinking about I think you talked about it earlier, Brian's question.

Speaker #4: But just thinking about Q1 being the trough to Q seeing a little bit of sequential growth. Should we continue to assume it builds from there based on the backlog of work and what you expect in terms of closed sales?

Speaker #4: I mean, should we walk into faster accelerating growth and then we exit the fourth quarter a little bit faster assuming there are no other surprises from the macro?

Speaker #2: Yeah, definitely. You know, when we look at the fourth quarter last year, you know, we closed at minus 4.7%. We look at this quarter, it was minus 0.7%.

Juan Urthiague: Yeah, definitely. When we look at Q4 last year, we closed at -4.7%. We look at this quarter, it was -0.7%. The next quarter, between Q1 and Q4, there was some sequential decrease. When we look at Q1 to Q2, we are going to see that there is sequential growth. We might also, depending on where we land within the range, there is a chance that we end up with some year-over-year growth.

Speaker #2: The next quarter, and between Q1 and Q4, there was, you know, some sequential decrease. Now, when we look at Q1 to Q2, we're going to see that there is sequential growth.

Speaker #2: We might also, you know, depending on where we land, within the range, there's a chance that we end up with some year-over-year growth. And when we look at the second part of the year, the combination of more working days that are still relevant.

Juan Urthiague: When we look at the second part of the year, the combination of more working days that are still relevant, plus, you know, what Martín Migoya explained at the very beginning, you know, some large contracts that have already been signed, they will start to generate incremental revenues. I think that's what should help us, you know, to have sequential growth both in Q3 and then in Q4 and probably end the year, you know, in a much better way when we look at the year-over-year growth. On top of that, you know, we will see hopefully the acceleration of our AI Pods that, you know, should be very, I mean, it is important because it's gonna start helping us not just on the growth, but also on the margin, you know, going forward.

Speaker #2: Plus, you know, what Martine explained at the very beginning, you know, some large contracts that have already been signed, they will start to generate incremental revenues.

Speaker #2: I think that's what should help us, you know, to have sequential growth both in Q3 and then in Q4, and probably end the year, you know, in a much better way when we look at the year-over-year growth.

Speaker #2: And then on top of that, you know, we will see hopefully the acceleration of our AI pods that, you know, should be very I mean, should be it is important because it's going to start helping us not just on the growth, but also on the margin, you know, going forward.

Speaker #4: Yeah, terrific. That's great. Thank you. Happy to see you all.

Tien-Tsin Huang: Yeah. Terrific. That's great. Thank you. Happy to see you all.

Speaker #2: Thank you. Yeah, same. See you next week.

Juan Urthiague: Thank you. Yeah, thanks. See you next week.

Speaker #1: Thank you, Tianxin.

Arturo Langa: Thank you, Tien-Tsin Huang.

Speaker #2: Thank you, Tianxin. The next question comes from the line of Brian Keane from Citi. Brian, please go ahead.

Arturo Langa: Thank you, Tien-Tsin Huang. The next question comes from the line of Bryan Keane from Citi. Bryan, please go ahead.

Speaker #5: Yeah, hi, guys. Could you just talk a little bit about those larger clients your top clients are growing faster with you guys? Maybe you know, is that just a sales focus and a little bit about maybe what those clients are doing in particular that could be the start of something bigger as we go forward this year and into next?

Bryan Keane: Yeah. Hi, guys. Could you just talk a little bit about those larger clients, your top clients are growing faster with you guys. Maybe, you know, is that just a sales focus and a little bit about maybe what those clients are doing in particular that could be the start of something bigger as we go forward this year and into next?

Speaker #2: Yeah, thank you, Brian. I'll take that one. So we you know, we are seeing you know, some very strong growth on our top 10 clients, around 4%.

Fernando Matzkin: Thank you, Brian. I'll take that one. We, you know, we are seeing, you know, some very strong growth on our top 10 clients, around 4% and quarter-over-quarter. That is a result of the 100 squared strategy where we've been investing so much focus and effort. You know, when you take a look every sample, as you say, from our top 20 clients, you'll see that the growth is really much higher than the rest of the lineup of clients. The kind of work that we are doing, you know, largely, you know, focuses on, you know, on AI-infused projects.

Speaker #2: And quarter over quarter. And that is a result of the 100 square strategy where we've been investing so much focus and effort. You know, when you take a look every sample that you take from our top 20 clients, you'll see that the growth is really much higher than the rest of the lineup of clients.

Speaker #2: And the kind of work that we are doing, you know, largely focuses on AI-infused projects. We are advancing conversations around migrating existing operations or starting new development with AI pods in the vast majority on our top customers.

Fernando Matzkin: We are advancing conversations around migrating existing operations or starting new development with AI Pods in the vast majority on our top customers. A lot of focus on, you know, using AI to gain efficiency, to develop faster, better, to get to market in better shape, to deliver more features, and to test these products with consumers in real-life production, you know, in shorter iterations. One very good example of that is Disney, where, you know, we're also seeing some very nice recovery this year compared to 2025, and where, you know, the focus of the new CEO, Josh D'Amaro, is really, you know, interconnecting the Disney guest, the Disney, you know, customer experience using Disney+ at the center.

Speaker #2: So a lot of focus on, you know, using AI to gain efficiency, to develop faster, better, to get to market in better shape, to deliver more features.

Speaker #2: And to test this product with consumers in real-life production, you know, in shorter iterations. One very good example of that is Disney, where you know, we're also seeing some very nice recovery this year compared to 2025.

Speaker #2: And where, you know, the focus of the new CEO, Josh Damares, is really, you know, interconnecting the Disney guests, the Disney customer experience using Disney+ at the center.

Speaker #2: And by having Josh coming, you know, from parks and experiences, he knows very well our work with Disney for so many years. And we are very well positioned to capitalize on his strategy moving forward.

Fernando Matzkin: By having Josh coming, you know, from parks and experiences, he knows very well, our work, with Disney for so many years, and we are very well positioned to capitalize on his strategy moving forward. At the same time, obviously, we are also having, with both Disney Parks and Disney Media, a ton of conversations, around migrating the operation to AI bots as well.

Speaker #2: And at the same time, obviously, we are also having with both Disney parks and Disney media a ton of conversations around migrating their operation to AI pods as well.

Speaker #4: Okay, that's great.

Speaker #2: Yeah. I wanted to add something to that because I think it's important. You talked about large customers, and with every single large customer, operational efficiencies and getting the most out of money is still the conversation.

Bryan Keane: Okay. That's great.

Diego Tartara: Maybe. Yeah. I want to add something to that because I think it's important. You talked about large customers. With every single large customer, operational efficiencies and getting the most out of money is still a conversation. It's there.

Diego Tártara: Maybe. Yeah. I want to add something to that because I think it's important. You talked about large customers. With every single large customer, operational efficiencies and getting the most out of money is still a conversation. It's there.

Speaker #2: It's there. And those large accounts, those top accounts, typically either belong to a heavily regulated market—like airlines or banks—or they have very high standards of security.

Martín Migoya: Those large accounts or those top accounts, typically they either belong to a heavily regulated market like airlines, banks. They have very high standards of security. When you see that, we have deployed AI Pods on 40% of the top 10.

Speaker #2: And when you see that, we have deployed AI pods on 40% of the top 10, correct me, but 40%. And more are on the way.

Juan Urthiague: Yeah

Martín Migoya: 40% and more are on the way, which pretty much not only validates AI Pods, the concept with top clients, but also most of those companies are pretty advanced when it comes to AI. It's not like they haven't tested, they haven't done it, and still they found a lot of value there. I just wanted to add that because I think it connects with what they needed and what Fernando mentioned before.

Speaker #2: Which pretty much not only validates AI pods, the concept, with top clients, but also speak most of those companies are pretty advanced when it comes to AI.

Speaker #2: It's not like they haven't tested, they haven't done it. And still, they found a lot of value there. So I just wanted to add that because I think it connects with what they needed and what Fernando mentioned before.

Speaker #5: No, that's really helpful. Thanks for those comments. And then just a quick follow-up. Middle East exposure in general how much do you guys have?

Bryan Keane: No, that's really helpful. Thanks for those comments. Just a quick follow-up. Middle East exposure in general, how much do you guys have and what's the outlook for Middle East kind of going forward? Will it, I mean, have you built in some cushion for potential disruption there?

Speaker #5: And what's the outlook for the Middle East going forward? I mean, have you built in some cushion for potential disruption there?

Speaker #3: Yeah, I'll take that one. So, you know, when we look at new markets, that accounts for about 6% of revenues. Middle East is about two-thirds of that.

Juan Urthiague: I'll take that one. You know, when we look at new markets, that accounts for about 6% of revenues. Middle East is about two-thirds of that. In the numbers that we provided, you know, the midpoint basically is assuming that things will continue more or less the way they are. You know, we are seeing deals getting closed.

Speaker #3: In the numbers that we provided, you know, the midpoint basically is assuming that things will continue more or less the way they are. You know, we are seeing deals getting closed, you know, we are seeing some deals actually starting.

Martín Migoya: Yeah

Juan Urthiague: some deals actually starting hopefully very, very soon.

Speaker #3: Hopefully, very, very soon.

Speaker #2: See the strong pipeline as well.

Martín Migoya: We have a strong pipeline as well.

Speaker #3: The pipeline is very solid. So the way we build the guidance for the year, basically, the lower end would imply a significant deterioration of that business.

Juan Urthiague: The pipeline is very solid. The way we build the guidance for the year, basically the lower end would imply a significant deterioration of that business. That's the main assumption on the low end is a deterioration from today that, you know, so far we are not seeing it, you know, in our numbers.

Speaker #3: That's the main assumption on the low end is a deterioration from today that so far we are not seeing it, you know, in our numbers.

Speaker #4: Okay, thank you.

Bryan Keane: Okay. Thank you.

Speaker #2: You're welcome.

Juan Urthiague: You're welcome.

Speaker #5: Thank you, Brian. The next question comes from the line of Arvin Rahmani from Trust Securities. Arvin, nice to have you back. Please go ahead.

Arturo Langa: Thank you, Bryan Keane. The next question comes from the line of Arvind Ramnani from Truist Securities. Arvind, nice to have you back. Please go ahead.

Speaker #1: Hi, thanks. Thanks for doing the call and good results. I wanted to follow up on the question Tianxin asked earlier. You know, certainly kind of validation just, you know, some of these anthropic and OpenAI making the investments is validating the services model.

Arvind Ramnani: Hi. Hey, thanks. Thanks for doing the call and good set of results. Yeah, I wanted to follow up on the question Tianjin asked earlier. You know, certainly kind of validates this, you know, some of these Anthropic and OpenAI making the investments validates the services model in terms of like last mile delivery. I think that's quite clear. Do you all kind of view them as a little bit of competition, because, you know, they're gonna be out there?

Speaker #1: In terms of, like, last mile delivery, I think that's quite clear. Do you all kind of view them as a little bit of competition?

Speaker #1: Because, you know, they're going to be out there grabbing some resources, competing with your clients. And how do you view the competitive environment? And just on that as well, if you can also comment on sort of the relationship you'll have with Palantir?

Martín Migoya: Some is.

Arvind Ramnani: You know, grabbing some resources, competing with your clients, how do you view the competitive environment? Just on that as well, if you can also comment on, you know, sort of the relationship you have with Talend here.

Speaker #5: Arvin, hi. How are you? Thanks for your question. This is an extremely large market. I mean, as I was saying before, every day there's a new, you know, company that is trying to compete there.

Martín Migoya: Arvind, hi. How are you? Thanks for your question. This is an extremely large market. I mean, as I was saying before, every day there's a new, you know, company that is trying to compete there, and these guys have very good distribution. They have some, I would say some things that are structural. For example, any of those two companies that are being formed right now cannot offer, you know, like model independence or cannot offer now like the way of, I would provide you with a piece of advice which is absolutely the best for you, right? That's something that is difficult to cope with. Of course, we see them as a competitor.

Speaker #5: And these guys have very good distribution. But they have some I would say some things that are structural. For example, any of those two companies that are being formed right now cannot offer like model independence.

Speaker #5: Or cannot offer now like the way of I would provide you with a piece of advice, which is absolutely the best for you. Right?

Speaker #5: And that's something that is difficult to cope with. But of course, we see them as a competitor. We see them as also a partner because we do things and they will do things through us.

Martín Migoya: We see them as a, also a partner because we do things and they will do things through us. We have built in these years, in these 23 years, exactly what they want to build right now. This is a massive support to our long-term business. The other thing is this is not a business in which one winner takes all. There are other business in which one winner takes all. In this business, it is a business in which the relationships with the customers count. The whole, you know, corporate relationships and MSAs you have and, you know, people that knows people and things like that counts a lot.

Speaker #5: We have built in these years, in these 23 years, exactly what they want to build right now. This is a massive support to our long-term business.

Speaker #5: And the other thing is this is not a business in which one winner takes all. There are other businesses in which one winner takes all.

Speaker #5: In these businesses, it is a business in which the relationships with the customers count. The whole, you know, relation—corporate relationships and MSAs you have and, you know, people that know people and things like that—counts a lot.

Speaker #5: And I would say that this is a scenario in which we have a lot of, you know, assets and a lot of things that we developed over the years to cope with that.

Martín Migoya: I would say that this is a scenario in which, we have a lot of, you know, assets and a lot of things that we developed over the years, to cope with that. Again, this is a massive market. I said $2 trillion only for technology. If you expand that into BPO, into call the process, all the processes that you have outside there, it's much larger than that. You know, I don't know, this is something that is too large. The change is that much. We are innovating. We are bringing the latest way of thinking to our customers. The customers are loving it. I feel extremely confident. I feel extremely confident that, for us, it's only a great signal of what we're building, as I said on my opening remark.

Speaker #5: So again, this is a massive market. I said $2 trillion only for technology. If you expand that into BPO, into code process, all the processes that you have outside there, it's much larger than that.

Speaker #5: So you know, I don't know. This is something that is too large. The change is that much. We are innovating. We're bringing the latest way of thinking to our customers.

Speaker #5: The customers are loving it. I feel extremely confident. I feel extremely confident that, for us, it's only a great signal of what we're building, as I said in my opening remark.

Speaker #2: Yeah, yeah, I would agree with that. You know, sort of my own research also suggests that, you know, enterprises are looking for multi-model approaches because, you know, if you just kind of go with a single model, whether it's Anthropic or OpenAI's model, you kind of are locked into that model, right?

Arvind Ramnani: Yeah. Yeah. I would agree with that. You know, sort of my own research also suggests that, you know, enterprises are looking for multi-model approaches because, you know, if you just kind of go with a single model, whether it is Anthropic or OpenAI’s model, you kind of are locked into that model, right? Then you’re kind of stuck with their pricing and, you know, kind of dev-development. If you have this multi-model orchestration layer on top, then you can not just these two, right? You can even use some Chinese models. What you’re saying makes a ton of sense.

Speaker #2: But then you’re kind of stuck with their pricing and, you know, kind of development. But if we have this multi-model orchestration layer on top, then you can—and not just these two, right?

Speaker #2: You can even use some Chinese models. So, what do you think makes a ton of sense?

Speaker #5: And not only that, Arvin, but also hybrid models where you can switch. You can actually use your own locally run chip models for simple things.

Martín Migoya: Not only that, Arvind, but also hybrid models where-

Martín Migoya: You can switch. You can actually use your own locally run, cheap models for simple things. Yes, that is totally correct.

Speaker #5: So yes, that is totally correct.

Speaker #2: Right, right. And if I can just also maybe reask the question on Palantir, right? Because I mean, are you all seeing Palantir on certain deals?

Arvind Ramnani: Right. Right. If I could just also, maybe re-ask the question on Palantir, right? I mean, are you seeing Palantir on certain deals? Do you look at them as a partner, or do you compete with them? Kind of what's your approach on Palantir?

Speaker #2: Do you look at them as a partner or do you compete with them? Kind of what's your approach on Palantir?

Speaker #5: No, we see them as a partner. I mean, we like them. They're a great company. I think that in certain places, in certain, you know, specific situations, we cooperate.

Martín Migoya: No, we see them as a partner. I mean, we like them. They're a great company. I think that in certain places, in certain, you know, specific situations, we cooperate. You know, again, we are a company that needs to solve the problems of our customers in the best possible way. That commitment that we have and that we will continue having is independent on any of the products that we use in the back. Sometimes we have things that can do a good portion of what our customers need, we use them. Some other times, we need to go with a partner, and we go with a partner. What is not compromised in any of our decisions is that what we are proposing to the customer is the best for them.

Speaker #5: So you know, again, we are a company that needs to solve the problems of our customers in the best possible way. And that commitment that we have and that we will continue having is independent of any of the products that we use on the back.

Speaker #5: And sometimes we have things that can do a good portion of our customers' needs. We use them. Some other times, we need to go with a partner, and we go with a partner.

Speaker #5: But what is not compromised in any of our decisions is that what we are proposing to the customer is the best for them. So I see Palantir as a company that we can cooperate, that we can expand our relationship.

Martín Migoya: I see Palantir as a company that we can cooperate, that we can expand our relationship, and we respect them a lot. They have a great product, and we believe that in certain places, we will cooperate with them.

Speaker #5: And we respect them a lot. They have a great product. And we believe that in certain places, we will cooperate with them.

Speaker #2: Perfect. And just kind of quick kind of follow-up, right? I mean, you know, certainly a good set of results, you know, when I think of like, you know, guidance, which is reaffirmed, was it reaffirmed mostly because you're being a little bit conservative?

Arvind Ramnani: Perfect. Then just kind of quick follow-up, right? Like, I mean, you know, certainly good set of results. You know, when I think of like, you know, guidance, which is reaffirmed, was it reaffirmed mostly because you're being a little bit conservative? Like, why not raise guidance, you know, in line with the beat and the momentum and all of that?

Speaker #2: Like, why not raise guidance, you know, in line with the beat and the momentum and all of this?

Speaker #4: Arvin, there is as you know, you know, we have part of our business in the Middle East. The situation there, as you know, changes all the time.

Juan Urthiague: Look, Arvind, guys, as you know, we, you know, have part of our business in the Middle East. The situation there, as you know, changes all the time and, you know, we wanted to be in a safe place, you know, and not take unnecessary risk at this point in time, you know. There is nothing to gain from, you know, taking too much risk on the guidance.

Speaker #4: And you know, we know we wanted to be in a safe place and not take unnecessary risk at this point in time. You know, there is nothing to gain from, you know, taking too much risk on the guidance.

Speaker #2: Thank you.

Jonathan Lee: Thank you.

Speaker #4: You're welcome.

Arvind Ramnani: Thank you.

Speaker #5: You're welcome.

Juan Urthiague: You're welcome.

Martín Migoya: You're welcome.

Speaker #2: Thank you very much, Arvin. The next question comes from Lam of James Friedman from Susquehanna. Jamie, please go ahead.

Arturo Langa: Thank you very much, Arvind. The next question comes from the line of James Friedman from Susquehanna. Jamie, please go ahead.

Speaker #3: Thanks, Arturo. I'll just ask my two up front. So, Martin, I'd be interested in your perspective about Globant gut. It seems like it's kind of like the higher end of strategy consulting.

James Friedman: Thanks, Arturo. I'll just ask, like, two upfront. So Martín, I'd be interested in your perspective about Globant GUT. It seems like it's kind of like the higher end of strategy consulting. And I'm wondering how you can use Globant GUT to generate incremental revenue downstream. Then, Juan, if I could just ask, last year, macro was under pressure in LatAm. If you could just give us the macro for the cliff notes on macro for dummies in Latin America, that would be great. Thank you.

Speaker #3: And I'm wondering how you can use Globant Gut to generate incremental revenue downstream. And then, Juan, if I could just ask, last year, macro was under pressure in LATAM.

Speaker #3: If you could just give us the macro for the clip notes on macro, macro for dummies in Latin America, that would be great. Thank you.

Speaker #5: I would take the first. I will ask Diego to complement, but gut for us is a very good way of entering customers. You know, marketing and technology, and to the AI gets connected deeper every day.

Martín Migoya: I would take the first. I will ask you to complement. GUT for us is a very good way of entering customers. You know, marketing and technology and to the AI gets connected deeper every day. The kind of caliber of ideas that these guys are having is really impressive. You know, when I see the reviews that we do, you know, every month with the teams, and I see, you know, when the guys from GUT come, it's very rewarding to see the caliber of campaigns, the caliber of ideas, the caliber of customers that they are getting. This is for us, like a door open for then come with all the rest of innovations we have on the technology side and keep on selling.

Speaker #5: And the kind of caliber of ideas that these guys are having is really impressive. You know, when I see the reviews that we do every month with the teams, and I see, you know, when the guys from Gut come, it's very rewarding to see the caliber of campaigns, the caliber of ideas, the caliber of customers that they are getting.

Speaker #5: And this is for us like a door open for them to come with all the rest of the innovations we have on the technology side.

Speaker #5: And keep on selling. I see this as a magnificent vehicle to expand that relationship, that everyday marketing, technology, and operations will be more integrated into the same thing.

Martín Migoya: I see this as a magnificent vehicle, to expand that relationship that every day, marketing, technology, operations will be more integrated into the same thing, and we can, as a company, tackle those three things, with our offering.

Speaker #5: And we can as a company tackle those three things with our offering.

Speaker #4: When we look at Latin America, you know, we are seeing a more stable scenario. Argentina is the country that is driving most of the growth in the region right now, followed by Brazil.

Juan Urthiague: When we look at Latin America, you know, we're seeing a more stable scenario. Argentina is the country that is driving most of the growth in the region right now, followed by Brazil. In general, I think it's a more stable scenario relative to other years.

Speaker #4: But in general, I think it's a more stable scenario relative to other years.

Speaker #2: Perfect. Thank you both.

James Friedman: Perfect. Thank you both.

Speaker #5: Thank you.

Speaker #6: Thank you.

Arvind Ramnani: Thank you.

Martín Migoya: Thank you.

Speaker #2: Thank you very much, Jamie. The next question comes from Lam of Guggenheim from Jonathan Lee. Jonathan, please go ahead.

Arvind Ramnani: Thank you.

Juan Urthiague: Thank you.

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

Speaker #7: Great, thanks for taking my questions. I appreciate the commentary earlier about the positive bookings environment. Is there any way to quantify what bookings were in the quarter?

Jonathan Lee: Great. Thanks for taking my questions. I appreciate the commentary earlier about the positive bookings environment. Is there any way to quantify what bookings were in the quarter, how that momentum may have trended from January through March, and what you saw in April into May?

Speaker #7: How that momentum may have trended from January through March, and what you saw in April into May?

Speaker #6: In the second quarter, no.

Speaker #4: No, I mean, April into May. So basically, you know, when you look at the first quarter and April and, you know, the couple of weeks from May, the situation is similar.

Martín Migoya: The Q2? No, no?

Juan Urthiague: No, I mean, April into May. Basically, you know, when you look at Q1 and April and, you know, the couple of weeks from May, situation is similar. We are not seeing big changes there. You know, overall, we had a very strong Q4. As you remember, it was a record quarter. That is helping us a little bit on what happened in Q1, you know, when we were able to exceed a little bit our initial guidance. It is also helping us to reaffirm the full year.

Speaker #4: We are not seeing big changes there. You know, overall, we had a very strong Q4, as you remember, it was a record quarter. That is helping us a little bit on what happened in Q1.

Speaker #4: You know, we were able to exceed a little bit our initial guidance. And it's also helping us to reaffirm the full year. You know, the level of bookings that we've seen in Q1 and in, you know, whatever has passed of Q2 is also allowing us to maintain the guidance, even in the situation that, you know, that we know that the new market region is under a little bit of stress.

Juan Urthiague: You know, the level of bookings that we've seen in Q1 and in, you know, whatever has passed of Q2, is also allowing us to maintain, you know, the guidance even the, in the situation that you know that we know that the new market recently is under a little bit of stress. You know, so far, no big changes and that's enough for the guidance that we have today.

Speaker #4: But, you know, so far no big changes, and that's enough for the guidance that we have today.

Speaker #7: I appreciate that, Color. And, you know, what in your customer conversations gives you confidence around that back-half ramp, particularly around sequential growth in the fourth quarter?

Jonathan Lee: I appreciate that color. You know, what in your customer conversations gives you confidence around that back half ramp, particularly around sequential growth in Q4, and how much go-get is potentially needed there?

Speaker #7: And how much go-get is potentially needed there?

Speaker #4: So, I mean, as we were discussing before, part of the—or the second part of the year has two main components. One, which is a higher number of days in the second half of the year.

Juan Urthiague: When I mean, as we were discussing before, part of the H2 has two main components. One, which is a higher number of days in the H2, and the second one is there is basically four large customers with whom we have already signed contracts, and those contracts should be able to help us, you know, because they are scaling as we speak, right? One of them is a professional services company that, you know, has been one of the drivers of the lack of growth in that sector that is coming back. There's a big tech company that we recently became a preferred vendor that's gonna help us also on the H2.

Speaker #4: And the second one is there is basically four large customers which we have already signed contracts. And those contracts should be able to help us, you know, because they are scaling as we speak, right?

Speaker #4: One of them is a professional services company that, you know, has been one of the drivers of the lack of growth in that sector that is coming back.

Speaker #4: There's a big tech company that we recently became a preferred vendor for, and that's going to help us also in the second part of the year.

Speaker #4: So and then we have already spoken about a gaming company in the last quarter and a PE-backed company as well. So those four contracts that are scaling as we speak combined with the account days of the second half are the drivers of, you know, the second half of the year.

Juan Urthiague: We have already spoken about a banking company in the last Q and a PE-backed company as well. Those 4 contracts that are scaling as we speak, combined with the count days of the H2, are the drivers of, you know, the H2 of the year.

Speaker #7: Thanks for that detail.

Jonathan Lee: Thanks for that detail.

Speaker #4: You're welcome.

Juan Urthiague: You're welcome.

Speaker #2: Thank you very much, Jonathan. The next question comes from Lam of Sean Kennedy from Mizuho. Sean, please go ahead.

Arturo Langa: Thank you very much, Jonathan. The next question comes from the line of Sean Kennedy from Mizuho. Sean, please go on.

Speaker #8: Hey, guys. Congrats on resilient results. Really great to see. So I was wondering, if you could discuss a bit more about the early customer feedback from AI pods and specifically, what are they saying are the greatest benefits from the program?

Sean Kennedy: Hey, guys. Congrats on the resilient results. Really great to see. I was wondering if you could discuss a bit more about the early customer feedback from AI Pods. Now specifically, what are they saying are the greatest benefits from the program, and if there are specific industries, you know, that are seeing more traction than others currently?

Speaker #8: And if there are specific industries that are seeing more traction than others currently?

Speaker #4: So like I mentioned, hi, Sean. Sorry. Like I mentioned before, one of the good things is that the data comes from our top accounts, which are the main drivers of the growth of AI pods.

Fernando Matzkin: Like I mentioned, Hi, Sean. Sorry. Like I mentioned before, one of the good things is that the data comes from our top accounts, which are, you know, the main drivers of the growth of AI Pods. Two different things. The first one is the benefits of the models, both in terms of efficiency, but also, in terms of the quality of the outcome. We've not just proven that we can produce faster, but actually that the quality and the full product and release is top-notch, right, according to the standard. Feedback has been very positive. In fact, a lot of the growth, we typically, the way we do AI Pods is we have an experimentation phase. Then we have a scaling phase.

Diego Tártara: Like I mentioned, Hi, Sean. Sorry. Like I mentioned before, one of the good things is that the data comes from our top accounts, which are, you know, the main drivers of the growth of AI Pods. Two different things. The first one is the benefits of the models, both in terms of efficiency, but also, in terms of the quality of the outcome. We've not just proven that we can produce faster, but actually that the quality and the full product and release is top-notch, right, according to the standard. Feedback has been very positive. In fact, a lot of the growth, we typically, the way we do AI Pods is we have an experimentation phase. Then we have a scaling phase.

Speaker #4: So two different things. The first one is the benefits of the models, both in terms of efficiency but also in terms of the quality of the outcome.

Speaker #4: So we've not just proven that we can produce faster, but actually that the quality and the full product and release is top-notch, right? According to the standard.

Speaker #4: So, feedback has been very positive. In fact, a lot of the growth—we typically, the way we do AI pods is, we have an experimentation phase.

Speaker #4: We have and then we have a scaling phase. And so typically, you don't scale if you haven't passed a testing, right, a operating under this model.

Juan Urthiague: Typically you don't scale if you haven't passed a testing, right? A POC, only 1 pod operating under this model, and then they do the switch. It is important to understand that when we are reporting revenue, it's actually, it has been tested. A couple of things that I think are super important and make a big difference. First of all, the process is baked into the tool, and this is actually great. This is first time we can do that. Before that, the process was actually a manual, if you wish, and you train people to follow that process. Now it's being baked into the tool, it's a lot more resilient to, you know, people, and it holds your knowledge. The second one, token consumption.

Diego Tártara: Typically you don't scale if you haven't passed a testing, right? A POC, only 1 pod operating under this model, and then they do the switch. It is important to understand that when we are reporting revenue, it's actually, it has been tested. A couple of things that I think are super important and make a big difference. First of all, the process is baked into the tool, and this is actually great. This is first time we can do that. Before that, the process was actually a manual, if you wish, and you train people to follow that process. Now it's being baked into the tool, it's a lot more resilient to, you know, people, and it holds your knowledge. The second one, token consumption.

Speaker #4: And then they do it the switch. So it is important to understand that the when we are reporting revenue, it's actually it has been tested.

Speaker #4: A couple of things that I think are super important that make a big difference. First of all, the process is baked into the tool.

Speaker #4: And this is actually great. This is the first time we can do that. Before that, the process was actually a manual, if you wish, and you train people to follow that process.

Speaker #4: Now it's being baked into the tool. So it's a lot more resilient to people, and it holds your knowledge. The second one, token consumption.

Speaker #4: This is something that we haven't mentioned, but it's becoming extremely important. A lot of the companies that have implemented tools such as CloudCode, Copilot, et cetera, they're working with them, and they're not getting the most out of that.

Juan Urthiague: This is something that we haven't mentioned, but it's extremely, it's becoming extremely important. A lot of the companies that have implemented, tools such as CloudCode, Copilot, et cetera, they're working with them, and they're not getting the most out of that. On the other hand, they have increasing spend on the token consumptions that start to be actually part of their P&L, an important part of the P&L. Part of that consumption comes from misuse of the tool, which means incorrect prompting and data preparation, incorrect description of the process you must follow, quality gauge, et cetera, et cetera. A task well executed typically takes a third, a quarter, or even less tokens than the same task with re-prompting, corrections, et cetera, et cetera.

Diego Tártara: This is something that we haven't mentioned, but it's extremely, it's becoming extremely important. A lot of the companies that have implemented, tools such as CloudCode, Copilot, et cetera, they're working with them, and they're not getting the most out of that. On the other hand, they have increasing spend on the token consumptions that start to be actually part of their P&L, an important part of the P&L. Part of that consumption comes from misuse of the tool, which means incorrect prompting and data preparation, incorrect description of the process you must follow, quality gauge, et cetera, et cetera. A task well executed typically takes a third, a quarter, or even less tokens than the same task with re-prompting, corrections, et cetera, et cetera.

Speaker #4: But on the other hand, they have increasing spend on the token consumptions. That starts to be actually part of their P&L, an important part of the P&L.

Speaker #4: And part of that consumption comes from misuse of the tool, which means incorrect prompting and data preparation, incorrect description of the process you must follow, quality gates, et cetera, et cetera.

Speaker #4: So, a task well executed typically takes a third, a quarter, or even fewer tokens than the same task with re-prompting, corrections, et cetera, et cetera.

Speaker #4: So that's another interesting and important data point, because you can actually see the tool in action, and you pay for what it actually produces—output.

Juan Urthiague: That's another interesting and important data point because you can actually see the tool in action, and you pay for what it actually produces output. Feedback so far has been great on every single implementation. The efficiencies have been shown and that's why it is a keeper. We have had not a single client actually going back from AI Pod, which I think it's a, it's a solid statement of the benefit it has.

Diego Tártara: That's another interesting and important data point because you can actually see the tool in action, and you pay for what it actually produces output. Feedback so far has been great on every single implementation. The efficiencies have been shown and that's why it is a keeper. We have had not a single client actually going back from AI Pod, which I think it's a, it's a solid statement of the benefit it has.

Speaker #4: So feedback so far has been great on every single implementation. The efficiencies have been shown and that's why it is a keeper. We have had not a single client actually going back from AI pods, which I think it's a solid statement of the benefits it has.

Speaker #2: Yeah. And also two more things. The fact that you can have an enterprise-ready process baked into that, you know, into that thing. I mean, there are plenty of people now by coding solutions inside corporations but then they are local in their machines.

Martín Migoya: Yeah. Also two more things. The fact that you can have like a enterprise-ready process baked in into that, you know, into that thing. I mean, there are plenty of people now buy coding solutions inside corporations, but then they're local in their machines, they're not scalable, not secure, not ready for the enterprise. With our AI Pods, we're being able to grab those things and those ideas and take it to the next level in terms of enterprise readiness. That's extremely important, how the process is documented all along the way, and we have an enterprise-ready kind of solution, right? The rest of the things is just benefits, right? You consume less tokens, you have a corporate process inside there.

Speaker #2: They're not scalable, not secure, not ready for the enterprise. And with our AI pods, we're being able to grab those things and that ideas and take it to the next level.

Speaker #2: In terms of enterprise readiness, that's extremely important—how the process is documented all along the way and that we have an enterprise-ready kind of solution, right?

Speaker #2: And then the rest of the things are just benefits, right? You consume fewer tokens. You have a corporate process inside there. You can repeat the process and improve the process every time with your customer.

Martín Migoya: You can repeat the process and improve the process every time with your customer. You can customize the process with the data of your customer. It's much better than the traditional services. What Diego was describing is a real AI-native service as opposed to the traditional service. This kind of scale on supervision is more similar to an assembly line rather than just a massive matrix of projects that you need to fulfill. The current businesses aren't going anywhere. As you see and demonstrated, it will keep on being and keep on existing. This AI bot is on a different level of execution. Totally AI-native, totally AI-driven, plus human supervision. It's being charged per consumption. You don't need to interview people. You don't need to do anything.

Speaker #2: You can customize the process with the data of your customer, so it's much better than the traditional services. This is what Diego is describing—a real AI-native service, as opposed to the traditional service.

Speaker #2: And this can scale on supervision. It's more similar to an assembly line, rather than just a massive matrix of projects that you need to fulfill.

Speaker #2: So the current business is not going anywhere. And as you see, and demonstrated, it will keep on being and keep on existing. But this AI pod is on a different level of execution totally AI-native, totally AI-driven, plus human supervision.

Speaker #2: And it's being charged per consumption. You don't need to interview people. You don't need to do anything. You just submerge there and everything gets executed with enterprise class and human supervision to ensure that you are doing the right thing.

Martín Migoya: You just submit it there, and everything gets executed with enterprise class and human supervision to ensure that you are doing the right thing. It's really a different value proposition. Our customers are really welcome it because it's a totally different way of being transparent too, right? A full transparency in each asset that we create. Each artifact gets connected to a number of tokens, gets connected to a number of, you know, consumption that you have there. It's really paying by the output rather than paying hours. It's really new model.

Speaker #2: So it's really a different value proposition. And our customers are really welcoming it because it's a totally different way of being transparent too, right?

Speaker #2: A full transparency in each asset that we create. Each artifact gets connected to a number of tokens, gets connected to a number of consumption that you have there.

Speaker #2: So it's really paying by the output rather than paying by hours. So it's really a new model.

Speaker #1: Got it. That's all great to hear. Congrats again. Thanks, guys.

Sean Kennedy: Got it. That's all great to hear. Congrats again. Thanks, guys.

Speaker #3: Thank you.

Speaker #4: Thank you, John.

Martín Migoya: Thank you.

Diego Tártara: Thank you.

Juan Urthiague: Thank you, Sean.

Martín Migoya: Thank you, Sean.

Speaker #3: Thank you so much, John. The next question comes from the line of Gustavo Farias from UBS. Gustavo, please go ahead.

Arturo Langa: Thank you so much, Sean. The next question comes from the line of Gustavo Farias from UBS. Gustavo, please go ahead.

Speaker #5: Hi, everyone. My question is on capital allocation. So, buybacks, of course, suggest the confidence that you have to have in the stock. But on the other hand, it could limit, potentially, strategic M&A.

Gustavo Farias: Hi, everyone. My question is on capital allocation. Buybacks of course suggest the confidence that you have after having the stock. On the other hand, it could limit potentially strategic M&A. If you could please share, how do you see the need for M&A in the short to medium term to remain competitive?

Speaker #5: So, if you could please share, how do you see the need for M&A in the short to medium term to remain competitive?

Speaker #4: We are always looking for things, and for opportunities. That's one, go away. And the other thing on the buyback, right, was?

Martín Migoya: We are always looking for things and for opportunities. That won't go away. The other thing on the, on the buyback, right.

Speaker #3: Yeah.

Speaker #4: It's at management's disposal. And as we see an opportunity to buy the company that we know, that is Globant, and that we trust, and we think it's undervalued. But if we find a better opportunity or better use to invest, of course, on our AI pods, or a company that we like and we want to acquire, so on and so forth.

Juan Urthiague: Yeah

Gustavo Farias: Yeah

Martín Migoya: It's at management disposal. As we see, we see an opportunity to buy the company that we know, that is Globant, and that we trust and we think it's undervalued. But if we find a better opportunity or better use to invest, of course, on our AI Pods or company that we like and we want to acquire, so on and so forth, I mean, we're not limited in doing so. A constant assessment on which are the priorities for our capital is being carried out, but we want to be extremely disciplined in how we increase our return on equity or return on invested capital moving forward. I don't know, Juan, if you want to.

Speaker #4: I mean, we're not limited in doing so. So a constant assessment on which are the priorities for our capital is being carried out. But we want to be extremely disciplined in how we increase our return on equity or return on invested capital moving forward.

Speaker #4: I don't know, Juan, if you want to.

Speaker #3: Well, yeah, definitely. We have the firepower to do M&A in case we want. But of course, you know, I mean, there's one stock that today is trading at a very low multiple.

Juan Urthiague: No, yeah, definitely. You know, we have the firepower to do M&A in case we want. Of course, you know, I mean, there is one stock that today is trading at a very low multiple, and it's a company that we know very, very well, and that's our company. Between that and buying something else, sometimes, you know, it really needs to be very, very strategic. It really has to meet a very clear need for us at this point to go and do that. Because at the current valuation, you know, there is a mismatch between Globant and some companies in private sector.

Speaker #3: And it's a company that we know very, very well. And that's our company. So between that and buying something else, sometimes, you know, it really needs to be very, very strategic. It really has to meet a very clear need for us at this point to go and do that.

Speaker #3: Because at the current valuation, you know, there is a mismatch between Globant and some companies in the private sector.

Speaker #5: Very clear, guys. For me, a follow-up—I think last quarter you guys seemed a little bit conservative on tackling fixed-price contracts and million margin concerns.

Gustavo Farias: Very clear, guys. If you may, follow up, I think last quarter, you guys seemed a little bit conservative on tackling fixed price contracts, mainly on margin concerns. We see fixed price as % of revenues, roughly stable versus last quarter. What are current view on that?

Speaker #5: And we see fixed price as percentage of revenues roughly stable versus last quarter. Other current view on that?

Speaker #3: Yeah, the market today, you know, pushes for fixed price. It's something that is a reality across the industry. Interestingly, you know, now we have tools that allow us to deliver in a more efficient way.

Juan Urthiague: Yeah. The market today, you know, pushes for fixed price. It's something that is a reality across the industry. Interestingly, you know, now we have tools that allow us to deliver in a more efficient way. You know, we can use our AI Pods to deliver on many of those contracts. We are more confident on the fixed price than what maybe we would have been a year ago or two years ago. It's something that, you know, we need to look at because the market is pushing for fixed price. You know, the tools that we have today in front of us allow us to, you know, to do better than or to do well in fixed price contracts as well.

Speaker #3: So you know, we can use our AI pods to deliver on many of those contracts. So we are more confident on the fixed price than what maybe we would have been a year ago or two years ago.

Speaker #3: So, it's something that, you know, we need to look at because the market is pushing for fixed price. And, you know, the tools that we have today in front of us allow us to do better than—or to do well in fixed price contracts as well.

Speaker #5: Very, very clear. Thank you.

Gustavo Farias: Very, very clear. Thank you all.

Speaker #3: Thanks.

Speaker #4: Thank you.

Juan Urthiague: Thanks.

Martín Migoya: Thank you.

Speaker #2: Thank you very much, Gustavo. The last question that we have time for today, unfortunately, comes from the line of Surinder Singh from Jefferies. Surinder, please go ahead.

Arturo Langa: Thank you very much, Gustavo. The last question that we have time for today, unfortunately, comes from the line of Surinder Thind from Jefferies. Surinder, please go ahead.

Speaker #4: Thanks, guys. I guess, Martin, you've been very clear about the ambitions for the AI pods model. Is 2026 effectively the year that you're gathering, I guess, data points to kind of really push forward with the strategy at this point?

Surinder Thind: Thanks, guys. I guess, Martín, you've been very clear about the ambitions for the AI Pods model. Is 2026 effectively the year that you're gathering, I guess, data points to kind of really push forward with the strategy at this point? How do we think about where the longer term ambition is? How much of your revenue can you get there? What is the current friction in terms of why clients aren't adopting it faster, given all of the data points that, you know, Diego kind of highlighted?

Speaker #4: How do we think about where the longer-term ambition is? Is it how much of your revenue can you get there? And then, what is the current friction in terms of why clients aren't adopting it faster, given all of the data points that Diego kind of highlighted?

Speaker #2: I didn't get the last part of your question, Surinder.

Martín Migoya: I didn't get the last part of your question, sorry there.

Speaker #4: Oh, the last part is just that Diego highlighted a lot of really positive data points about the AI pods model, and so how do we think about that in terms of why clients wouldn't be adopting it faster?

Surinder Thind: Oh, the last part is just that Diego highlighted a lot of really positive data points about the AI Pods model.

Martín Migoya: Yeah.

Surinder Thind: How do we think about that in terms of why clients wouldn't be adopting it faster? Is there a natural balance within your business ultimately in the long run between the AI Pods model, maybe fixed price contracts? Or how do you think about where all this is heading and where you would like it to ideally be?

Speaker #4: Is there a natural balance within your business, ultimately in the long run, between the AI Pods model and maybe fixed-price contracts? Or how do you think about where all of this is heading, and where you would like it to ideally be?

Speaker #2: Sure. AI Pods is kind of a way of delivering, which is absolutely different from before. And it's an AI-native service, which we deliver in a totally different manner from before.

Martín Migoya: AI Pods is kind of a way of delivering, which is absolutely different from before, and it's an AI native, you know, service in which we deliver in a totally different manner from before. Our Forward Deployed Engineers are just trying to do the agentic transformation, the AI agentic transformation of our customers, helping them with processes, with reinventing and rethinking marketing processes, you know, human resource processes, you know, account receivables, account payables, finance, financing, finance processes. There's a constant connection between how you create a future project with our Forward Deployed Engineers and how ambitious is that project and how you deliver that. Both things must be extremely innovative, and this is what we're bringing to the market. First idea, how to make an agentic transformation of your business.

Speaker #2: Now, our four deploy engineers are there just trying to do the agentic transformation—the AI agentic transformation—of our customers, helping them with processes, with reinventing and rethinking marketing processes.

Speaker #2: Human resource processes, accounts receivable, accounts payable, finance processes. So there's a constant connection between how you create a future project with our four deploy engineers, and how ambitious that project is, and how you deliver that.

Speaker #2: Both things must be extremely innovative. And this is what we're bringing to the market. First, the idea of how to make an agentic transformation of your business.

Speaker #2: And then, when that is ready, we don't deliver in the traditional manner, but we deliver with AI-native services. So long term, my ambition is that although our current business, as we deliver today, will keep on existing because many of our customers prefer a way of engagement, this new way will start to slowly, number one, gain in market share.

Martín Migoya: When that is ready, we don't deliver in the traditional manner, we deliver with AI native services. Long term, my ambition is that although our current business as we deliver today will keep on existing because, you know, many of our customers, it's the preferred way of engagement, this new way will start to slowly, number 1, gaining market share, right, from other competitors, and number 2, transforming the way we deliver our current services for our customers. The ambitions are large. I prefer to refrain from giving you any number, but I have in mind like, as a way of transforming our current business into something totally different.

Speaker #2: Right? From other competitors. And, number two, transforming the way we deliver our current services for our customers. So the ambitions are large. I prefer to refrain from giving you any number.

Speaker #2: But I have in mind, as a way of transforming our current business into something totally different. And this gives you a place to think about many other things.

Martín Migoya: This gives you place to think about many other things like, you know, how to create those tokens that we would use in the AI models, how to distribute them, how to route them, how to I mean, it's a pretty different game when you start thinking about charging per output or per consumption in the case of software development life cycle. When you are talking about an AI Pod of operations, you may charge per, you know, streaming monitoring hour or per.

Speaker #2: Like, you know, how to create those tokens that we will be using in the AI models. How to distribute them? How to route them?

Speaker #2: How to—I mean, it's a pretty different game when you start thinking about charging per output or per consumption in the case of the software development lifecycle.

Speaker #2: But then, when you are talking about an AI pod of operations, you may charge per, you know, streaming monitoring hour or per ticket sold.

Fernando Matzkin: Ticket solved.

Speaker #2: I mean, there are hundreds of different delivery units that we may use on our AI pods. Our customers will be extremely tangible, and not in the same way it used to be.

Martín Migoya: I mean, there are hundreds of different delivery units that we may use on our AI pods that our customers will be extremely tangible and not in the same way it used to be. This technology is giving us an opportunity to change the whole business, and this is the aspiration we have. Now, how fast we can do it will depend on our customers, on how good our AI pods work, so on and so forth. That is what Diego was describing. I don't know, Juan or if.

Speaker #2: So, these technologies are giving us an opportunity to change the whole business. And this is the aspiration we have. Now, how fast we can do it will depend on our customers, on how good our AI pods work, so on and so forth. That is what Diego was describing.

Speaker #2: I don't know Juan or.

Speaker #3: Yeah, no, but listen, we are seeing many, many very interesting conversations progressing with all of our top customers. Right? Most of our top customers.

Fernando Matzkin: Yeah, no, like but listen, we are, you know, we are seeing like many, many very interesting conversations progressing with all of our, you know, top customers, right? Most of our top customers. Our top customers are really marquee customers, and they are leaders in the space and where they are. Without exception, they are either in the, you know, piloting phase or scaling phase, and those who are about to start are assessing the technology. The interest we are seeing in the top customers is very strong. There's no structural friction with the clients whatsoever in the model. I think it's just a matter of our clients understanding the technology and progressing the processes and so on and so forth.

Speaker #3: And our top customers are really marquee customers. And they are leaders in the space and where they are. And without exception, they are either in the piloting phase or scaling phase.

Speaker #3: And those who are about to start are assessing the technology. But the interest we are seeing in the top customers is very strong. There's no structural friction with the clients whatsoever in the model.

Speaker #3: I think it’s just a matter of our clients understanding the technology and progressing the processes, and so on and so forth.

Speaker #4: That's helpful. And then, just as a quick follow-up on the commentary about the forward-deployed engineer, how much of that, based on your earlier comments, is what I would call just a rebranding of the way that work used to be done in certain instances?

Surinder Thind: That's helpful. Just as a quick follow-up on the commentary about the forward deployed engineer, how much of that, based on your earlier comments, is what I would call just a rebranding of the way that work used to be done in certain instances? How much of that is potentially structurally different that you guys might have to do? Meaning does a forward deployed engineer have to be on site to a larger extent? Does it change some of the economics? How does that impact you guys given that you guys had optimized for mostly delivery offshore?

Speaker #4: Or how much of that is potentially structurally different that you guys might have to do? Meaning, does a forward-deployed engineer have to be on site to a larger extent?

Speaker #4: Does it change some of the economics? How does that impact you guys, given that you guys had optimized for mostly delivery offshore?

Speaker #3: I think it's actually an interesting question. So I'll tackle that in two different stages. First, the formation. I mean, what does it mean? And what's the delta between a very good engineer and a forward-deployed engineer?

Martín Migoya: I think it's actually an interesting question. I'll tackle that in two different stages. First, the formation. I mean, what does it mean and what's the delta between a very good engineer and a forward deploy engineer? First of all is the platform and knowledge of the platform. Any forward deploy any of deploys a platform, it has to have profound knowledge of that platform. The second one has to do with the work that most of enterprise architects used to do, and that's the keeper, which is understanding the architecture components, data security, et cetera, of the target client and what's the best integration strategy. The third one is.

Speaker #3: First of all, is the platform and knowledge of the platform? Any forward deployed engineer deploys a platform. They have to have profound knowledge of that platform.

Speaker #3: The second one has to do with the work that most of the enterprise architects used to do, and that's the keeper, which is understanding the architecture components, data, security, et cetera, of the target client.

Speaker #3: And what's the best integration strategy? The third one is a little bit of building on top of that, with regards to building the solution.

Diego Tartara: A little bit of building on top of that with regards to building the solution. That's the enablement of the Forward Deployed Engineer, then it comes to solutioning. The deployment is actually functional to that solution, so it's also important that that person understand the problem it's trying to address. There's a conversion and reskilling that while conserving a lot of the learnings of that type of engineer, you need to build something on top of that. We needed a retraining of most of our top engineers to make them Forward Deployed Engineers.

Martín Migoya: A little bit of building on top of that with regards to building the solution. That's the enablement of the Forward Deployed Engineer, then it comes to solutioning. The deployment is actually functional to that solution, so it's also important that that person understand the problem it's trying to address. There's a conversion and reskilling that while conserving a lot of the learnings of that type of engineer, you need to build something on top of that. We needed a retraining of most of our top engineers to make them Forward Deployed Engineers.

Speaker #3: So that's the enablement of the forward deployed engineer. Then comes the solutioning. And the deployment is actually functional to that solution. So it's also important that that person understands the problem he's trying to address.

Speaker #3: So there's a conversion and reskilling that, while conserving a lot of the learnings of that type of engineer, you need to build something on top of that.

Speaker #3: So we needed a retraining of most of our top engineers to make them forward deployed engineers.

Speaker #2: And do they have to do more work on site? Or because on-site building is very different than offshore?

Surinder Thind: Do they have to do more work on-site or 'Cause on-site deployments?

Diego Tartara: Oh, that's the second part.

Martín Migoya: Oh, that's the second part.

Surinder Thind: are very different than, you know, offshore deployments.

Speaker #3: Yes, second part of the question. Yeah, we can actually execute a lot, typically what's called a discovery. It's a lot better when it happens on site because a lot of the things have to do with interviewing people that are related not only with the platforms, but also with the areas and the processes you need to convert.

Diego Tartara: Second part. Yeah, second part of the question. Yeah, we can actually execute a lot. Typically, what's called a discovery, it's a lot better when it happens on-site because a lot of the things have to do with interviewing people that are related not only with the platforms, but also, you know, with the areas and the processes you need to convert. Typically, if you do it on-site, it's a lot better. Still can be done offshore, and we have done it.

Martín Migoya: Second part. Yeah, second part of the question. Yeah, we can actually execute a lot. Typically, what's called a discovery, it's a lot better when it happens on-site because a lot of the things have to do with interviewing people that are related not only with the platforms, but also, you know, with the areas and the processes you need to convert. Typically, if you do it on-site, it's a lot better. Still can be done offshore, and we have done it.

Speaker #3: So typically, if you do it on-site, it's a lot better. Still can be done offshore, and we have done it.

Speaker #4: Thank you.

Speaker #1: Thank you, Surinder.

Surinder Thind: Thank you.

Speaker #3: Thank you.

Martín Migoya: Thank you, Surinder.

Surinder Thind: Thank you.

Speaker #2: Thank you, Surinder. So, with that in mind, that's the last question we have time for, unfortunately. I will now turn it back to Martin Migoya for some closing remarks.

Arturo Langa: Thank you, Surinder. With that in mind, that's the last question we have time for, unfortunately. I will now turn it back to Martín Migoya for some closing remarks. Martín, please go ahead.

Speaker #2: Martin, please go ahead.

Speaker #4: Thank you, Arturo. And thank you, everyone, for being here today and for your continuous support. Thank you so much. See you in the next quarter.

Martín Migoya: Thank you, Arturo, and thank you everyone for being here today and for your continuous support. Thank you so much. See you in the next quarter.

Speaker #3: Thank you.

Surinder Thind: Thank you.

Martín Migoya: So

Speaker #2: Sander Pichai just passed a decade as CEO of Google. Alphabet is now not only one of the world's biggest tech companies, but a leader in the AI race.

Tien-Tsin Huang: Sundar Pichai just passed a decade as CEO of Google. Alphabet is now not only one of the world's biggest tech companies, but a leader in the AI race.

[Video Narrator]: Sundar Pichai just passed a decade as CEO of Google. Alphabet is now not only one of the world's biggest tech companies, but a leader in the AI race.