GLOB - Earnings call transcript Q1 2022

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Carolina Dolan Chandler

Good day and welcome to Globant's First Quarter 2022 Earnings Conference Call. I am Carolina Dolan Chandler, Chief Digital Officer at Globant. All participants on this call will be on listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded and streamed live on YouTube. have copy should release. the you now, received of a earnings By

you is copy not, on If a investors.globant.com. available have our website,

today Diego Tartara, Co-Founder Migoya, Chief Technology Urthiague, Patricia are Executive Global Chief speakers Pomies, and Juan Officer; Chief and Officer; Operating Officer. Officer; Financial Our Chief Martin

our to that and questions. and our today of to we Please deemed may some risks with Before you forward-looking I the business comments the Such statements. IFRS like would statements are the statements. the SEC. financial of follow and begin, includes subject in described and be accounting outlook company's uncertainties our financial on rules note answers the other as remind This that we earnings to some in our release filings call

call today, the internally performance measures, our peers industry. report we non-IFRS in compare to will and how is we Globant or the which During adjusted track easiest to way our

non-IFRS press You at website will find over measures now Investor quarter's we on announcing our of release like end this Relations the Migoya, results. CEO. the our a to turn call reconciliation I'd published of IFRS to and Martin the

Martin Migoya

organizations geographies I'm experiences. This X.X% important meet points excited are growth. In technologies for to of so deliver again. garner and with be superb revenue will to right all to events to through XX% $XXX.X was estimates demand quarter-over-quarter need XX.X% has digital short-term seamlessly made been to grow. at our plans and total companies growth strong updates. growth. times, Regardless eager This news Because to QX, enterprises sectors our entrepreneurial culture geopolitics, transformation. of to and users the and global the interact touch another and results. these expanding deliver organizations continues million, representing in technologies their all of with possible the Good Across back leverage to markets innovation that XXXX year-over-year everyone. for of ability accelerate need quarter was by afternoon all digital company's happy everywhere business our some for you I'm share creativity, Globant's transformation. sort and

customers the continue New At our such capabilities engaging Metaverse we employees scale new they and will have as Globant, to trends arise. with ways to appear. and identify of as built

offer have we the with like innovation, between Metaverse confident intelligence, delivery we're ideation, mix to end best We done reality, through end and agile technologies, design Just our to full and or deliver augmented clients artificial in solutions our global Blockchain the capacity engineering. model.

move on Now, sad in Even though before the stand either conflict. families we of like Russia's and this we we operations say on, regarding shock or Globant invasion we of are I the country, affected family with have how by clients Ukraine. to don't behalf

will We develops. this situation can providing all continue the as help we that

I to like for insights would on our continue as grow future our teams talent. Now, to the some of we share plan

our calling newest enable talent in opened we on continue in expansion. intend our expanding we us such building expand region. office To accommodate to opened In Tower. largest which plans Santiago. to high city, the Globant geographic regarding our will First, Chile, Latin development local our the we are to office our in new of we XX%. we In the one recently executing In team. continue centers, [indiscernible] the by in a increase workforce America, have have our growth, rise It

and plans to locations, we to enforce ourselves choice digital as of physical want promote launched sense, the for flexibility. autonomy have we employer our moments. this different Beyond In

provide anywhere to career travel the want and develop same policy from flexibility time. our example, at for their who For aims work to those

division. with I'm X share reach software this portfolio XX% step well Japan. X in Most of Their its Globant involves the all our companies using will pillar that importantly, our Globant no-code making X to growth GeneXus our in revenue recent of acquisition most second is as Our excited Last acquisition platforms as platforms of the software. comes clients. month, a Globant into software simplify also each our organizational by and to to Globant of development need we code announced and development experiences innovative comes technology platforms. big geographic our two AI trusted under directly enterprise generating regions come expand for its regarding new with products. low-code partner is organizations concept geographic developed our through complements our strategies acquisitions for applications address future. world taking trend vision acquisition the user The of scratch. the as company. software AI without guide powered GeneXus, products addressing a GeneXus to an of over is low Globant of expansion easier learn from from this and X,XXX solution Asia huge a the

complexity removes First accelerates fast people powered augmented code simple. helping and document automatically multiple understand that product makes our bases engine AI Augoor, accessible clutter and basis. coding from the by code from Its process. Augoor repositories coding the code more

acts And to Today, MagnifAI Second amazing forward in glass Nissan. magnifying assurance for automated faster an continue better drive already MagnifAI, products. Reinvention Studios. and by results. our such the Automation, being powered finally, that and is enable a we testing way product product as Disney to as offers Rockwell used delivers AI clients the that visual quality

consumers platforms. their choices hit decades their many studios, products to across and all services. Reinvention for payments smart new for when trend Today, these pay challenge to and need two begin inflection Companies where, even sectors helping an been pleased things growth how, interface are amazing With point pandemic. and reliable about talk I'll Today the ways an in to with payments with have have our many across clients done for with Digital Studio. our industries. Studios. clients we Reinvention as I'm we the way different are

payments studio secure. most to move payment customized early Studio, leverage smart reskilling. for workforce. frictionless we the the Until trust. analytics, solutions disruptive need is Globant's faster professionals and spent important scalable digital that also education paradigm UX, upskilling the technology in lives to we learning, provide blockchain capabilities deliver created changing the make and respond launched to into EdTech We then experiences Reinvention shift With of recently and formal the adaptability drive in Recently and and sector. creating their parts to world, lifelong an payments simpler, the AI, have with education Today, more constantly

industry engaging experiences. our learning pathways provide we studio, EdTech in to the and personalized With leverage best develop the experience

new new and brings and with expand a find more to table. in Kong, in like about We're and human Pacific world. board markets Andrea as growth news She our even Latin perspective America. built would we some Asia capital the an of seek share at JPMorgan member. of the Hong more forward Petroni to insights welcome look I to and communities career clients Lastly, Andrea to director board partners, We investment ways diverse directors. connect and our glad Based extensive has throughout exciting in both her as to to business banking newest advisory, to

growth As We're and clients, the our we the of pipeline across forward, sectors to regions a in deliver different world. upcoming in ability look have years. Globant high confident strong continues to

over Diego you technological I our please. Diego, much. look offering, at like to would turn our closer to expanding Tartara, a CTO. very For it Thank

Diego Tartara

Thanks, hello our Martin, how help growing Globant's I'm here share to and to and ways of on transform. clients we everyone. new studios insight network find

holistically new as two need Studios. need launched have Reinvention to there consumer trends we mentioned, reinvent that face Martin they are driving As a a is see the that understand to industries due We expectation. several to

the the appearance One trends of these is of Metaverse.

era. our trend still stages, findings. while Organizations Report a now only accessible them, it they as have respondents to this stay. of the Sentinel Metaverse it. that XX% to We with is uncovered of new new early is experienced just feel to for here users XX% launched very face the their interesting key their about them get while learning to world its this We this in challenge embrace business ready need are While

they key invite more So To sentinel.globant.com. there's Metaverse for huge clients continue we and our world. potential you into to report check this new read accompanying as dive our Sentinel a about trend, the we'll this

decisions. give is the learned with assembling to the creation ready that this of we our to expand we decades the organizations many have clients fixing transform. two capabilities, to they agile announced to to of organization within carry of we the In make are right As studio organizations. to right have performance lack teams a same Last leaders want out our succeed digitally and digital information level not that we tools who digital of the performance parts, output change. In right improve an as position tasked this, cases, all and build processes month, the

through has also efficiency are performance This only environments decisions our methodology. We into new into performance, that to learnings of have the collected pod aggregated and foster This make studio insights not informed turned talent. teams. proprietary help attractive and a provide platform leaders insights improve these but data for that top

deal firm, UK-based a our story Together, consumers transform like Globant a less venture most Metaverses fin-tech WhatsApp, work technology payment Improbable, art brands portfolio platform interact told would a Sevenzonic. of platform providing cards our Moreover, about share in to a This companies, in engineering our to more our with company. partners. technology. They're network I to create services virtual PowerChute with closed our allows their Metaverse groundbreaking to used creators X has clients interoperable Now, Morpheus apps that excited establishing Spain. will make spaces and the from solutions Web part you by through payments technology I'm friction. and X.X moving Spanish capital set of how with are powered Globant's share to digital we and and to recently we with

center help party better component This is to Dropbox The third technology new for and eager are from because XX sites search engine artificial a [indiscernible] as retailers. an delivery experiences carried products intelligence with Falabella of the and one while we will and model them XX%. up smarter and developer simplifying working together faster. participating support expected will are as engineer a a this for working improve we're by out platform a search. We're ways result new engineers intuitive space smart seamlessly collect America, AI bringing Mallplaza, Dropbox this and located project The we're this in of of online but solution. partners. sites. physical of part internal and its commercial the integrated and build largest for Group, for assign pick the professionals to back create region's a Latin do through it agile purchase in with Mallplaza's the platform hardware human integration to with core In is be click management context This productivity, Then Globant's the flexible To partnering to with knowledge customer mission. office and it’s be customer enterprise local one to to shopping at driven much We repositories. partnering customers product

capture into to ensuring in Inter-banking for and is a Lastly, is launch the the program an also disruptive we operations acceleration America, intelligent its platform, Globant and in more Latin transformation services and making momentum. a management. and with continue digital middle leading products, their are solution, boosting centralized financial platform sector, and payments platform industry accounting digital market transformation. work new a efficient develop of single BXB to treasury. and transactions streamline in Through multi-bank the profound

Now, to over it Patricia COO. our I’d to like turn Pomies,

Patricia Pomies

as clients. news our our as our again. share nice to It’s to snapshot Disney The well our excited XX% with to this of and quarter-over-quarter. X.X% be XX.X% quarter-over-quarter. collectively year-over-year be of It I’d year-over-year The client. a everyone. Globers work our Walt of grew and reflected and begin a by accounts with Company with continues quarter Hello, here I’m X.X% QX. growth largest rest

to Our results. show XXX-squared continues strategy

last that XX year. more revenue to last brought than $X $XX million XX million accounts month, from we compared the Over had in of

than had ago. million one revenue XXX $X XXX with customers year compared to also of We more annual

geographic EMEA revenue revenues from was their North the into Asia XX.X% X.X% of Turning from distribution in from QX, and America, of XX.X% Oceania. XX.X% from and our America, Latin

lasting net partners metric determine the our believe During as of our quality monitor transformational score our I building relations as overall view meaningful, how our last and our relationship. we service we share earning our a call, consistent to clients and We in [ph]. prevention how carryout promoter with

remains quarter. two the the above previous well happy I’m in that benchmarks. score XX QX, had Over last to see month we a this of industry ending the points above XX, IT

represents year-over-year. expanding, are an increase of XX,XXX XX.X% IT team minds. XX,XXX our keep Our represents increase now This professionals. of Globers This of we of are year-over-year. Globers creative XX.X% an

delivery having grow to in geographic And our well-balanced centers. continue consistently are We distribution. of towards worked our we presence all a proud of

our of at headcount our locations Some increased have such year-over-year. growing rates, as unprecedented we have been by where India, XX.X%

XX.X%. rate high competition Our is talent corona is that There denying is attrition as as ever. for no

XX,XXX experience on processes in may focus such It’s and prepared diverse solving career to different to and embrace primary address Globers and ongoing development are X,XXX to a personal for go is We the Code achieve counseling. leadership organization’s Simply over teamwork. align scholarships place reinventing we in the happy talent internal aim benefits and Future been and that to put, a focuses satisfaction. is In initiative. model to onboarding needs on we as have improving Glober training this This each share and both, Glober have reflection this Today, a the constantly technology. parental areas, From work all in join to Globant have. developing granting Glober-centric as world, our challenges will or reality, needs our autonomy, needs be of make we However, that of an best put previous we the talent inverted we adapt all internal be management. parallel, the are benefit client programs Glober-centric benefits the stage global Glober chart new with lives. career standard opportunities company IT as this better principle people to a new different pyramid the Globers are talent goal to in people through in our different we mindset and the ones mapped BeKind any beyond what initiative approach, experience. we we With for the offer thing where The we believe To I times, industry. of help are of be in that creativity, approach our anywhere the want encourage simplify to bloom to offering for line as that courses and industry for scholarships training we by am run place to the world. each Your career the new

At proud We investing it’s that tools are education programs inform, and through careers facilitate are motivate, transform We believe in same and positive to and having of reality world. broader time, generations. stem these the inspire community impact the to to that to imperative the bring really respect the continue the around in access right younger similar the to we want initiatives.

of set through see to help proud a the to innovation. Our throughout that our of more. the the much project work so to of initiatives disruptive the aims all and that endless one are world can great I’m that to people We field inspire see technology generation offers next teenagers environment. opportunities contributing spark million up a young we courses, extremely workshops reaching goal

Colombia, for the applied to We in India, the ranking, place States, are we are have been really United we as with we where great Argentina our Mexico. culture, Uruguay, work. countries In place happy work such recognitions this named such the all a to as great receiving and

to financials. of to place strive talent. for for in to and will it you be everyone. And a Juan We’re I huge turn that, Thank we the best front opportunity with the continue the over

Juan Urthiague

I Thank hope all everyone. doing good you, you’re and afternoon, well.

will year summarizing guidance XXXX. then quarter quarter. by results for our discuss first full second I start of and me the Let the our

with XX% for business constant as QX growth basis results year-over-year delighted to of was year-over-year the are was XX.X%. for industry-leading robust momentum. growth Globant continue for our to XX.X% of growth deliver be XXXX, revenue growth. sequential first representing were effects around our estimate and continues the to a QX quarter We continue We about show growth million enthusiastic organic company. X.X% overall on Revenues QX we future our $XXX.X and

our the robust operations. start services for in as upcoming platforms digital investing calls for end-to-end companies of their prior the demand We now confident was pandemic. in and levels growth digital of where is discussing the stronger delivering before years, the in it COVID-XX than feel continue transformation As

profitability. to now Turning

Our quarter Adjusted operating profit of adjusted environment million, amounted ongoing the adjusted for strong, increasing gross labor the of our quarter in or to efficiencies pricing revenues for compared with million be the And $XX first period compared to first for $XXX.X continue income margin the gross to of quarter XXXX. to million adjusted market. increased margin or in $XXX the representing largely and continues XX.X% XX.X% XX.X% to gross $XX.X million of XXXX. drive revenues the also to we Demand XX.X% size. inflation SG&A offsetting representing

to continue drive profile to help products, that the the a revenue required breaking margin maintain us. platforms in of seize amount this healthy linearity. and company will increasing support and revenues we us of adjusted front addition, the employee Together, In from a growth market and making attractive in though services, opportunity small investments continue operating

compared largely guidance. the representing effective was for XX.X% XX.X% line adjusted $X.XX quarter million Adjusted on year, income based of XX.X with year-over-year growth. for to million shares the of margining this Our average Adjusted the XX.X net quarter for the for our compared Adjusted the XXXX, adjusted diluted for quarter solid based IFRS QX quarter. on quarter shares EPS for $X.XX for diluted net first the totaled implies to of average tax XXXX. representing $XX.X million XX.X% XX.X% rate quarter EPS diluted was a first quarter for the income $XX.X net first income in million margin

of and as sheet, XX, investments and cash balance XXXX cash, amounted equivalents the million. to on short-term to $XXX.X March our Moving

and during of As line credit undrawn. second to year, Currently our prior years. QX free a and free concentrated half payments. expected with is was fully flow cash the significant it as is the forecast negative expected bonus tax flow improve facility in generation cash QX we

also acquired to continue recently our We successfully planned. allocation integrations on capital as of companies going execute with strategy

be about a would current full revenue to for Based the tax least percentage million to expected This expect IFRS year million of XX% for least average QX we year-over-year to is range. X.X QX is for Adjusted revenues XXXX adjusted to expected in $X.XX visibility, QX quarter. guidance outstanding be XX.X shares at diluted XX.X% is and growth expected assuming be in margin XX% talk $XXX.X XX% I impact points. includes EPS XX% XXXX. on to range. Now, be operating our growth. like diluted at or negative expected effects to effective rate to the the the

This the negative expected XXXX, Regarding year-over-year XX.X% $X,XXX at growth fuller effects revenues to revenue million we two growth. impact expect percentage points. includes be of least or a

in expect margins in For expand to further be XXXX, range year the XX% operating IFRS to invest our XX% while to develop and strongly we XX% we coverage to in in for adjusted rate to training our sales effective tax continue expected edge technologies XX% cutting to range programs full XXXX. the be is our business. the

least year. participating for your adjusted Thanks diluted the full Finally, XXXX, the the to courage we be for our assuming in XX.X everyone million $X.XX for outstanding average and year for support. expect call shares diluted EPS full at

Operator

you, Juan. Thank

Please your of go your as and from please question-and-answer, line through your the sorry, Huang line question first point questions. The [Operator ahead. announce the I question and we from answer will Tien-Tsin At we call, that go of today unmute go Instructions] this ask the name. section comes As JPMorgan. to

Tien-Tsin Huang

me. Carolina. hear Hope Hi. Thank you can you

been of a low-code, wanted we’ve in interesting. on lot and Nice the course. GeneXus hearing results, acquisition, you was thought ask to no-code Okay. the about guys that course did you really marketplace which the I theme, of

no-code with that going to you and and that off takes curious broader think there’s change do low-code, just in I’m how way. better how feels application like it believe So, a effort in be just fits Martin you development? just about It a team, if

how on own. understand the does used to help trying change from right building to build application, applications tools, the seeing development others we’re I’m their so guess application I building right, So, to as that

understand So, I’m to trying the broader the for road means model? Thanks. what just that down

Martin Migoya

I of we of of faster. which for things, in understand is here entire being and to much and of so million mean, how to have a way how create think way banking can integrate how taking developers industry. thinking an traction the And we and you to of create I called ways you using And the for X explaining is code. to different that way now a code of big of a started that a within do. the much it’s augmenting document, manner can code code Thank imperative Globant initiative and code of we of fields create we there. core dragging which Augoor. better software believe and Tien-Tsin. for part a of dropping playing reinventing what amazing today. lines have into describing Absolutely product industry natural that, And is to help and the lot system changing we And augmented examples we with about question already is we And thank the how absolutely with this I coding a that in were GeneXus understanding really gaining creating kind in systems levels are. role

and that the difference testing discover, our are the and Augoor is which real computer So that testers which MagnifAI, to then between product on I has developed. between which vision believe GeneXus, the initiative, been help augmented prototype are

that towards software steps, my there developing we future. into past We actions augmented that develop the concrete reinventing the about way is perspective kind industry are in talking And been about talk this an when creating propel has engineering and the vision the concrete of will initiative. of

engineering. So, its yes, okay think with low augmented I code,

software totally way manner. a to different create it's think a I in

GeneXus over that we but to keep in towards to have will that would integrating steps just we with Augoor, it more to maybe one and Diego roducts is course, platform. and with MagnifAI, love. head that is Of giving about that, I the and because initiative something more vision this more more with explain But, that we more on this love

Diego? So

Diego Tartara

said, and that one point, as here a thing ago we Sure. a point at market after developer remember And been Martin in XX with about GeneXus coexist. Like they at had in first I that like touch discussion years low-code/no-code was over. And I taken the I got mean for another years. that GeneXus there the are XX years

tool the No given And growing, want allows low-code/no-code drivers However to not a fast. multi-platform the development rapid solid, to in a settle the cetera, itself, and create interfaces, a tool top-notch solutions, a this software but with et without growing traditional and create clear it just change software. coding, to of not is strong type platform of into type footprint allowing very templateized design you but only is evolved very you very, of technology, development, strong and that frameworks, mature change. is to of has is followers. be change GeneXus this incorporated we

there years in the here are of how So drive about ahead, studying on? XX is like of move to going be we what's develop bet we going will is integral our want on? – now. ecosystem, software. What only to like now part an you This be XX thinking said, Martin to next is we years want And one terms

There as standpoint, use for again, strong baseline to for think this it's move to This be GeneXus, a a Globant but of will very as down tool. from the road amazing. opportunities think and amazing. bring will type different is use immediate it's I solutions, strategic that a So it results, I looking further –

Tien-Tsin Huang

the for both you thoughts. Thank Great.

Let me ask a quick if that's okay. just follow-up

any one FX, pieces just in anything what the raise think were what else the that's contribution, about pretty and the had, course, to about we with said but there of call guidance inorganic organic, guidance ask change? that of here. on you consistent the Just to two I the What out? change have question, points

Juan Urthiague

Yeah, sure.

estimate of year the for year-over-year which guided which growth. So we billion, around XX.X% organic growth is we $X.XXX XX.X% about

$X the rest weeks. So it because deal I is for smoothy, to very mean, is million going the the three next adds the GeneXus close, in year, hopefully around two, of

a this very impact year. it's for So small

it's and very to However explained, as Diego Martin relevant us.

So in which of are primarily and summary And we dollar. the seeing GDP, from have XX%, of FX, to impact year, Euro for points due percentage XX.X% coming to organic. negative are about XX.X% appreciated full relative the out which the the two significantly

Tien-Tsin Huang

thank guys. you Perfect,

Juan Urthiague

welcome. You're

Operator

Thanks, going Tien-Tsin. is question Please line from Ryan the of The next go Potter come from Citi. ahead. to

Ryan Potter

Congrats I question. touch the the market taking my just and to for quarter good on thanks on competition wanted talent and there.

for Given the Latin areas India look and started competitors lot America talent. have in situations, ongoing to a of India, geopolitical your more aggressively like

or attrition those time. believe was to lead elevated talent inflation I any in if wondering So this just markets over seeing you're incremental and if you wage competition for in those could markets,

Patricia Pomies

fast about the so mean, not Well, thing of last of want happy as months, little as thank the mostly shocked I was a places well Colombia growing was we of in are been and places I what India. other that as course, yes, what and question. as And numbers same are the the India's the in than Argentina. and talent that have an have course, from small Romania our acquiring you office the I of have, in helping for mentioned very building, situation Martin all Well, see world your Belarus and I we we mean couple the we But you mean, of we a office I were in is that that the that we that talent some was situation all know you say. to have continue mean, course, mean was happening. growing we first the and there. for

hope sustain keep sustaining I us, the that, are of rest And we been and I has quarter. growing continue for to I the that So in something we we keeping to don't talent, I course, we recall.... – the the mean mean, going mean, pace for of

Martin Migoya

that take will part. I

talent, for inflation see much So the we world. definitely inflation pretty yes, year. in this wage more terms will competition wage is throughout over of all There

right joining value meet that attracting to we proposition we Now right we to our for to people feel talent culture, we have targets. the need the the right believe company. keep on continue And our projects, the comfortable

Diego Tartara

in Yeah. day, about And I anymore and is would pretty we compliment a America with one it's large one – would to more one concept say operate cannot I more not continent day that's far. that. now the into we capability turn mean, by place. capability and I in need in market to and And America our Latin largest you the we America have Latin have easy.

a competition to everybody's even good America in like point largest like And So are opportunity, may and to region. because Latin it's the that gives I believe looking starting that us, start capability very biggest that discussions. the us with an challenge the we the a now, largest look and though into

So industry. develop trend every convincing how of and happening that that of thousands sustainability more how very the newcomers although And create in we're for best and And you're future thing the that possible we're month. to seeing to into position. is I America the one in a the for industry thing, is Latina believe this which important that's

we're region, only now. and of and capability opportunity strength into amount than the summarizing having believe deeper challenge. recruit to reach places rather capabilities your that of a as this leaders our largest in us I And cities, doing and other as terms go positioning question, in largest to the So is an to employees to the

the every XX is expand talent have where that is the cities. but so have you Patricia but years as we more have that years situation seen the are, in as that been and all in been countries, popular pillars glad happening, places moments And want the very bad. are have region more one what the Ukraine living closer on our And at are more all And it's just as difficult keep forever, think this for about said, sorry, it's very in growth very, the day to and core things – XX pandemic. the those and cities, this to also Talent, now into keep during And least, better. on very for more to helping opportunity. and pitching we America, that's the to in more the talent of in much analyzing need. So happening not that talking you we is we I are We'll Russia, as it's we in last terms least we everywhere. we at of

Ryan Potter

like Understood. touching up guess, attrition the it quarter, little also just, on seems a And in I bit. it tipped

competitors of So in you or I terms skill was quarter space. attrition there a kind any some concentrated new past the most, said in I was countries bit wondering areas the of where little Argentina was in know in coming heightened sets those with if

terms terms one you don't it in that in going still that in or plan that with your more kind doing color if what headcount presence, of be have guys then you Belarus terms So heightened know to of on And Argentina. and a of balance plan of any in just slow you if on was front, the guys it's exit? maintain

Martin Migoya

Yeah.

more to attrition at be quarter. it is to people still a by that primarily number We we decrease things don't There last to same sometimes. in the happening next see countries maybe part Argentina, macroeconomics. It reached where change make seeing of that willing driven jobs attrition increase We the continues happening the stay given eventually believe XX.X% that second quarter. other the around year. lot in this of should going some levels. is start to So And for the slight quarter compared

more country. So it's I concentrated, one say would in

Pat, want you there. question it for I As of part Belarus, if second the about know take probably your don’t

Patricia Pomies

we career move trying to move, and or the to to some I they situation tools them want to Argentina. if that been their Belarus have mean, we to and to the close course, want if of they I explain continue giving in very them mean, we people from opened Globant.

As we is this Globant you have know, DNA in Globant everywhere. that

from So you opportunity move cities. different have the to

So we to where And we they're living planning. some families now. help move they're Argentina there and right

places. Others, planning Some mean probably to other to back of them if or they're are for coming stay long. I moving are evaluating

strong, have office there I are close keep we Belarus and and the mean, really in course open we Of a there. functioning we

different Ukraine. those of and of in I positions that head are with example, strategies zone helping in been like the now some been have Romaine for families women, the cases. the have mean, We in for opening in we

been we recruiting in the people have So earth. front some

of people move things the office near we lot and can, places an of to want I find so near operate there's that can we a there opened opportunities So be we and that think course some also Poland just in or they live.

Martin Migoya

have We than less XXX.

have XXX people around We

Patricia Pomies

only important Yes of their families that in course. are important for Belarus, but Globant they're us, really really for

Ryan Potter

Understood Yeah. Juan. and thanks

Patricia Pomies

you. Thank

Operator

from is go Itau. going from come of Arturo Langa Thanks, Ryan. the to ahead. Please The line question next

Arturo Langa

everyone afternoon, results. two and questions. on congratulations I the Good have Hi.

much and on YPF bet on wanted sort congratulations, on YPF the And congratulate digital in double company a or that be in ask to the first And effort. that that that the me such think question. country your a transformation access get second the thought the wider about opportunity questions. to of to GeneXus company that's on a are for is type wanted set to I with that project would for that much to much down the just a GeneXus appear my chip two award interesting that's then of think solutions. offer such for clients. thought also carrying of Argentina better out I regarding inflation I environment just one would macro just wider current will a Argentina wanted it's And back could those or finalized very recent you I guys' I big It Globant is for acquisition, around of expanding COOs the but Patricia in of payment one a your and reflection blue oil as to I product that. clients.

Patricia Pomies

team I than Thank voted building a other XX,XXX you, honored feel more I I this mean, course, peers. role. being, Arturo, thing by COO very voting is were and much. very There the because of some on mean people

the us. we is So XX doing there has all are been altogether for in top just something that Globant of being one on

So team building it good here. we are shows in that

I'll I about Diego explain. Arturo. So you, let And think to GeneXus, thank

Diego Tartara

Sure.

regards for existing they tool partners with the solution, and the and So in as it you go-to-market to they how's say to for GeneXus, probably was to GeneXus. definitely, a – used GeneXus plans the terms use we way the The that solutions creating model, and how know sell many have was commercialized. of is actually

we what And largest in way, have potential and a YPF, a the they one to gas now oil of have the ago. joint you YPF, company them. by long do actually that regards Argentina. resolve the the they of what And services of to in a what be they going XX one be users, the of to as the going were had was mission things offer to much a transformation mentioned effort. we is And about definitely, I part stations how relate is of XXXX. to the was terms years more how they transformed, producer they to time their set needed with With and is for started started think offered that gas going there transformed. being in right? transformation, blue-chip to And

YPF. in second from app, with partnered is which Argentina was services much the time that And of means them in It's we receive job, transaction, by So you wallet that as the more. largest a of part ago. terms long creating besides a

connect station. the gas You to

the pay wallet. with You

they active if central to part So ones the set go of XX% XX% success, of their today. like actually, in the KPIs, the the growth – very in improvement proposition system, the we've gas payments our increase I just reduction, through stations, know, XXX% value of the wallet. their had in through members go rock as don't a the it et go on you it's NPS, users, And cost we reward their cetera, through

So it's a success. major

ago, a has they big long very a actually yes, time is, but profitable. YPF been paying it's off actually, So time bear as business

Arturo Langa

for the Very Perfect. No. interesting. Thank you. answers. you Thank

Patricia Pomies

Arturo. you, Thank

Martin Migoya

Arturo. you, Thank

Operator

Diego is to the next from of come Thanks, Sachs. Arturo. question ahead. line Please from Goldman Aragao go The going

Diego Aragao

everyone. Hello, hi. Yes, to you all. see Good

first Interesting congrats see to results. look trends in So solid challenging a on environment. very the

congratulations. again, So

Or say, the So business, a coming and economic company demand? of impacting Thanks. more are the invest might representing digitalization a in slowdown this order the see in to is you my need overall more sale regarding of in we years, question that seeing do to is efficient? kind overall for be let's activity. either environment The the your macroeconomic risk in event in

Martin Migoya

you much the Thank question. for Hi, very Diego.

Here companies interesting to Martin. question. for all – analysts reinventing They're kind doing And still intact. of They're are are that in services need digital way beyond in this for on and our they beyond right? forecasting are like trend no keep rate, will demand It's see, what the transforming, general, businesses which any beyond keep way on efforts is will And transformation interest And so and, of I an way long-term so that. which doing of trend basically are inflation. believe that on their matter they forth. trends them now, and that growth you huge market an going.

do I of that Now kind we is already of more for with digital was But happen for the we bring instead concrete a those which to in And there's still looks statement, things what to of can could way, market money to lot great initial short don't here, pay ever. be what different bigger you which know. tell same what other need interest to and terms rates term I in paying competitors transformation, I there's a is do our want companies in share. a than said very market needing pipeline the don't. And money my in still to which

past trend a more they having doing believe space. that and same industry. very very And same this reinventing a I Well, way, a playing cars towards Also, trend there trend So trying to the businesses that have there's moving going a clear here, are in from are there's been way the they is in the that. thing Teslas. the see how to into we're in different are – people clear do going companies traditional

strong very the So I future. our towards be believe will demand

for it's industry the fight, explaining customers, our a different course, us, to to whatever. Of do to day-to-day what we

two rate So things increase. pretty any interest sorry, being demand on independent – rates very keep – much that those I will strong. the believe And from will I believe be

Diego Aragao

can How right. this question. how will guess in when portfolio, to you look next eventually mean, Thank I footprint? the XX you, specifically just important complement M&A, months, Martin. maybe That’s your your it very a helpful. M&A, I And be follow-up

valuation wondering was and be So some this a founders say, they used Thank already right it of Given the whether see where companies some to of of, also and let's you. couple their business? is where is now I for how you private and month the ago? a impacting

Martin Migoya

market slower impact Happy to that. – valuation, private lines tell will the an of impact I are absolutely answer. on our what like we which them. opportunities, seeing you will Well, to three go is seeing address from the that But I inorganic the different can growth side. growth inorganic which you is percentage lead valuation can And into Juan that already is tell that would of are reflecting we

in The to first expand in being how faster figuring how Europe, to one faster geographical expand Latin expansion faster Asia, expand how America. to out and in

things adding general. things The second, into saying in or is how on before, into we adding we I keep augmented was or engineering which keep on GeneXus-like as platforms things augmented concept, how coding

doing has way then, been course, have with who side, with been So even we other things. and little on happening software changing on the any companies specific don't that by things companies, the bit, companies avenue of an that, acquisitions public mean, acquisition interesting occur of or private that's yet that's improve opportunity. there's Spain, a things I of another valuations many in we way, we there to because interesting the some do customer And want some side like

So and healthy action valuations quick because it's it's thing. to which, those – like things here to But a take see decisions. pay avenues a opportunities and in very given thing, I tactic and changing, moment opportunities long-term don't are seeing very in attention and it's tactic essence, those they think I way very a three also yes, concrete

if want know, Juan, to I So you don't complement?

Juan Urthiague

this a XX% over bit little I No. the growth of an always, as We quarter – is XX.X%, actually again, organic. mean, was Globant play. organic

for So we out roughly that of year the the full organic. XX.X% guided, number are XX.X% XX%,

will doing continue momentum was saying, have the we And business. been Martin strong with as always organic deals complement strategic offering – organic in with So we we mostly, in inorganic to our see as past.

Diego Aragao

Perfect. Thank you.

Juan Urthiague

Thank you, Diego.

Patricia Pomies

you, Thank Diego.

Martin Migoya

you, Diego. Thank

Operator

Please next question ahead. from go to Thind is The come Diego. the of going line from Thanks, Jefferies. Surinder

Surinder Thind

taking guess can to would I about me the growth, questions. [indiscernible]. sequential bit think understand argue I if guide focus little when the and help than I you for like you guide it's weaker Thank in you that on the quarter. the guess I'd my a

second can is in So comment usually growth on that? you strongest quarter. There's the typically sequential

can versus, me have that So talked see help you commentary understand that about you near guys picture you trends? term secular demand the obviously,

Juan Urthiague

is a number the at slight year full year. the The compared Yes. increase of what to guided beginning we

range, on increase to a continues slight same it So from to be the XX% XX.X%.

growth. On year the We quarter-over-quarter stable growth a this see quarter, is more what roughly quarter-over-quarter. did we X.X%

of guiding QX, of And are holidays, the has is year QX. be April. the I lot growth. that. to a to quarter-over-quarter in all always and happens like seems a quarter-over-quarter an We acceleration for stable is when around April, QX which impact, growth mean where in number given you that the X% there has and especially But in some month see terms you which of days do math, more will seasonal

plus grow about organic XX%, was You're are growth when the similar mean demand, above strong demand talking the to inorganic. Because the XX% levels is significantly levels numbers year, throughout see show which When XX% Martin going the long-term for we – I of year. to still that, of right? pre-pandemic used XX%

which given long-term are solid companies especially a how live behavior So demand think, current talking and pre-COVID very growth, given are. to we people their we the that I environment in their the changed above definitely how XX percentage changed And more needs, the I believe where is, digital world. level, points about

in opportunity. are big of is geographic you indications opportunity. nonexistent talk opportunity which enormous long-term you the can another an Europe, those at well as clear When think us, how look very look always as Asia, much pretty opportunity I are about that's When see at for over we there. the we you

growth. in quarter-over-quarter say, as between least growth, to are sorry, what lower [ph] all, let's X.X% for you're typically So us then QX I QX, and kind quarters that's now. at see quarter-over-quarter going have than of of which more slightly think happens seeing the X% all and, we ability in But we all

Surinder Thind

venture my Got and you that when products. why was fintech third Any about applications something party? the Is heard this with helpful. own follow-up was here Watch me with it. Apple say, project, build the so And Is there guys firm different let's the done on That’s building being that capital you of as that's then question, something London more understand, product. your forth versus a color that? I help relationship just for,

is different Is of what more terms in that approach? So the here? productization

Martin Migoya

to how be platform interfaces. which based familiar But our conversational to PagoChat a to interface the fintech trends accounts create I I able to in any digital mean, PagoChat. are No. know is solution, answer with future to you is conversational don't like on that some money is a terms of sent create of

product for developing developing the a we of create together that wanted by to And fund in that's that years. approached that technology to development we a have we been the and Spain customers. solution final Now like solution, platform, have a a platform a that been like with that use with got

with the So to them technology, all partnered bring right. we

Spain, to whole solution so doing will everything do play, will solution need and they equity the the like to final creating it We they that happen. creating they paid the for in do payment that get are make technology, the

if the answers of the your was know that don't spirit that, but question I So deal. or? that

Surinder Thind

options. helpful. We That's can take

Martin Migoya

us, We to with to always of not are providing, providing we're sector that the our technology and we in but which in is do and it. very, do we we maintain we're technology customers are very something technology wants Yes. it, intend any to for We compete case, do providers. clear won't whomever allowed this

it, not that. change anything We do does this from but will

Surinder Thind

you. Got it. Thank

Juan Urthiague

you. Thank

Martin Migoya

welcome. You're

Patricia Pomies

Thank you.

Operator

to Katri Surinder. the of next come go ahead. Moshe from Thanks, is line from The question going Please Wedbush.

Moshe Katri

some could bit talk the and is slow then maybe road? lot. driving down, where perspective, very things couple which numbers. relatively your strong your Thanks thanks. talk follow-up, you from India, and for or really some question and a see a weakness my first, and congrats headcount in of Hey, it's as a a think growth on know about A I down that this about, European small significant taking can And can India Thanks you where we the our impressive road. the you has maybe down what's talk of out do bit mix kind been about goes headcount business?

Martin Migoya

– the Okay. part – nice forgot first Yes, distracted trees. by got we I place the already

Patricia Pomies

It's fantastic – background.

Martin Migoya

No, look

Moshe Katri

exposure, European yes.

Martin Migoya

is I operation I fast. small. our see very mean, Europe much stronger in before, Europe but growing than very still

I very see don't So there, transformation look is a the company And happens in I maybe digital see of absolutely every are concrete something opportunities you terms but there, at. need for still are the M&A that who taking describing some opportunities for effect again, there.

us. as know the will show can will So the what happen, that in for during in be that believe strong, but very don't I this And get numbers. Europe Europe strong will growth I will we year be

the Maybe you that strange strong discussion more strange So strong another have I happens, activity will now, already I right happen. going that believe as have for as past. how will don't done there very if M&A being on but very in around can things the know something keep we growth be that, and are

So that's on Europe the side on.

Moshe Katri

yes. exposed Which countries are to –

Juan Urthiague

some delivery compliment and then have me we one, Germany. exposure as is so exposure in the Let on now to of UK our that of Spain. most And

fact exposure continent XX% We the a by as where win our Those think are Italy, that, France we world, to the the that But grows we today, are around us are business there, gives of if a main to Europe very a over slowly to opportunity exposure. have it's whole some to player, maybe just, than we small. the or have exposure because Switzerland. rest areas of some as and that even I small the

the a in We said organically have done we building invested have we we team. and looking Martin have deals also, in past been as have and the few

from as think coming seeing, I well. should So very start growth we Europe good

Globant. for of On third center India now India, the part the development right is largest second

way same expanding integrated for same quarter. it's aggressively have is as Mexico, than as way Colombia, now way company. very Argentina fully this to the the We the larger been by The very, Colombia

we to are you So a just That's why of presence work it projects, that's the strong competing think, and start same regional places global like competing. same company not to of competing everywhere. the at the is countries see mean, seeing but you you're middle a becoming with with, I the in together And more time. have what see Argentina, in the I Pune. going in more India, rest we

opening very, We another are in very shortly. city

much larger that It's and very, operation And very about India hear few soon. a we in do to we around XX% years. today. see XX%, see You'll the definitely next India, becoming getting XX%

Moshe Katri

Argentina? is where And

Juan Urthiague

now? It's around, XX% right Argentina it's

Moshe Katri

appreciated. Much Thank you.

Juan Urthiague

Thank you.

Martin Migoya

you, Thank Katri.

Moshe Katri

Thanks.

Operator

The next to Ajzenman going from Moshe. Zachary of Thanks, ahead. question from come line the Cowen. Please go is

Zack Ajzenman

Hi, on thanks. for Zack This is Ajzenman Bryan.

out. Eastern and us geopolitical the the from situation Europe to question over fall relates First in demand

take business looking curious clients, region conflict the signed Globant flexibility who to Just exposure levels exposure? de-risked current and to on are any is, Globant that de-risk to the utilization clients have the with has incremental additional give

Martin Migoya

happening and demand and seeing capacity side, ready It's as take much we I version the all Thank absolutely they recruiting those on speak. yes, pieces engine engine coming. other of And the at speed are version. – our general the in is over, the longer Short version demand question. or think training long all and – engine to you short that for be, would a we're question is

us. fine it's perfectly that. And becoming So a unfortunately for growth of for drive

Juan Urthiague

of have Yes. we can, part four we around utilization for QX course past. us XX.X% second gives additional And in question, to done was of two room then, utilization the points the your that on around percentage have utilization, in the we of

the XX% We of have XX%. past at levels been to in

those some deals is I I we our on by room there can mean, take So additional don't need there, headcount. we also expanding that. mean, but

have, some there. I before, cost eventually discussed pressure levers we which that there think we us is offset of help as utilization of the one is also it's that to the may

Zack Ajzenman

theirs. of revenue the the the us breach in quantify any QX. the client you And side And issues on the up place lingering in it. or end the That in or lapses, there's put spillover has that about is you Are been there could changes. Thank follow just if cyber if QX any side? delivery to mitigate for on Globers Got at is any you. impact to talk QX, took which place have able

Juan Urthiague

even first the part; want about. talk take you I to

And last it the on that some is So immaterial on then very quarter. the, on of the QX, because, no there the the is, very, before event was I small happened day the last, happened impact was April. during impact there the QX, month think of that

Martin Migoya

On question. the the of second part

current identified and claim a then extent the the the evaluated the documentation attack very we time cyber regarding code. some approximately about We exposed the, this happened been by our clients extent, the ago, we source finished attack X% one that of quickly. about meaning first probably as our the, status, have six of to round, you some some information what we situation So as a attack. received and that We lapses know, executing contain that week was

they places deprecated. got access the part, was outdated most and information or the the servers For that given, to

our that client, and We the both affected immediately affected every of we within business with place a So weren't put being the ones continuation program. connected ones weeks. couple in

for normal weeks. restored part like, XX% our the restored have our We couple operation a most was of of within operation

gone of partially to As today, one only has operation. back small client

confident the type years. this first XX been the approved. This I'm has And contained. of that, So, attack to has been say this situation has in

for We a company, a in prepared we and test. the we think learnings, to of a, quite being prepared. episode, here say but can after opportunities improvement of lot I terms as be have there, this passed us we're, that of We but lots I had proved

Zack Ajzenman

much. very Thanks hear. to good That's

Juan Urthiague

you. Thank

Patricia Pomies

you, Thank Zach.

Operator

ahead. come Thanks Piper line question Sherman-Lewis go Jamesmichael Zach. The next of going is Sandler. from the Please from to

Jamesmichael Sherman-Lewis

strong me. Hello first a quarter, the everyone. Congratulations couple on from

pricing, with First the certainly increases? the, offset comfortable inflation. a you are sustained up larger But And that be do bill clients early held to on margins quarter. points, magnitude also up have in sufficient what that proof there'll rate

Juan Urthiague

year. solid margins level the we cost have over last in out, early and good pointed of to last, during the we had margins you over all as quarters, to that able last the started had and – but we five only QX, seen were happen solid a QX, So we offset not increases

do roughly us cost basically increased the increases. We year-over-year. the that We our That's XX% And main revenue head, have offsetting, keep for that per increasing. number. will a very costs driver was solid believe on

live. continue have customers, calls and will where to world hire live our we the in inflationary technical people same the current We customers price with for the those negotiations, clearly in price sector. discussions talks also environment They

there, know So they have I mean, is will conversations. there inflation also continue we to some that cost will and those – we

us part in to help And maintain historical eventually levels margins utilization of hopefully, our on work gross target again XX% will We to margin. offset the XX% to that. we

We believe stay range that. environment. on to the the we been upper, we this of should upper be the range, inflationary even within have able that But in on

Jamesmichael Sherman-Lewis

services? economy, Yes. yet I any and put, potentially we helpful cracks color. for as the on that declines transformation stickiness earlier should demand question, pin with appreciate That's And then to demand to an steeper you about global very think versus it. the relative enterprise Diego's seen digital a digital have legacy a in of how up follow

Martin Migoya

been addressed I think, part of of terms this demand. in So our has

legacy is year our thing to company, the one time a can of the bit it from than closer you the and stronger deals year little the year, if the I extended transformation that this say ever. has transformation digital compared beginning the from but changed So of to, that with takes regards to efforts pipeline, is last appetite last to opportunity the maybe has from to for see digital moving digital

be very, good. very So it continues to

see solid, current no geopolitical that very that with there. we headwinds we the and So so situation stable, continue very expect even economical to trend, and situation,

Jamesmichael Sherman-Lewis

Okay. you. Thank

Patricia Pomies

Thank you.

Operator

section to Thank now That will Jamesmichael. Thanks you today. comments. be I will all Q&A for the provide all. ask closing the Martin

Martin Migoya

much. to participating thank stay contact for today, looking let's for talking forward in keep you you and everyone and Thank soon. Thank and you us very joining

Patricia Pomies

Bye-bye.

Globant (GLOB) 20 May 222022 Q1 Earnings call transcript