Globant S.A.

Good day and welcome to Globe and Second Quarter 2021 Earnings Conference Call. I'm Amit Singh, Head of Finance for the U.S. and Global Head of Investor Relations. All participants on this call will be on listen-only mode. After today's presentation, there'll be an opportunity to ask questions. Please note, this event is being recorded and 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.globin.com. Our speakers today are Martin Migoya, Co-Founder and Chief Executive Officer, Juan Urtiaga, Chief Financial Officer, Patricia Pomeas, Chief Operating Officer, Gilbert Engelbien, President of GlobantX and LATAM, and Diego Tatara, Global Chief Technology Officer. Before we begin, I would like to remind you that some of the comments on our call today may be deemed forward-looking statements. This 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 Globin 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 InvestorLation website announcing this quarter's results. I would now like to turn the call over to Martin McGuire, our CEO.

Thanks, Amit, and hello, everyone. I'm happy to be with you again. Today, we will look back at our strong first half of 2021. We will also share with you our vision to reinvent ourselves and our professional services industry. But first, let's look at Q2. We closed the quarter with $305.3 million in revenue. This represents 67.1% year-over-year growth and breaks last quarter's record as our strongest year-over-year growth as a public company. And, as we look back, Globant's revenue has surpassed $1 billion over the last 12 months for the first time. We expect to close this year with more than $1.2 billion in revenue. I also have the pleasure to share with you other important news. We are now a team of 20,000 Glovers working all over the world. It took us 16 years to reach 10,000 employees. Today, just two years later, we have double our team. I'm proud of the extraordinary growth and the individuals who have joined us along the way. They inspire me every single day. As we know, strong technology companies are defined by creative, resilient, and adaptable people on their teams. Gloman has put this at the center of our work. We will continue to scale up our talent worldwide while fostering our culture of innovation, entrepreneurship, and reinvention. Every person, business, and even nature itself face a need for reinvention. They need to evolve and to become better versions of themselves and to navigate through constant challenges. It is our vision to seek reinvention in everything we do. We apply this concept to our clients as we help them create a way forward into a sustainable future. We don't just supply technology for short term. We design profound transformations to go beyond digital. And we apply it to ourselves as we provide our glowers with the tools to augment their work, to develop new skills, and to build and transform their own career paths. I'm happy to see how this case of reinvention is resonating with our investors' community. Confidence in our track record and our vision was reflected in our last follow-on in May. It was more than five times oversubscribed. Almost all the participants were fundamental, long-term investors. This capital helped solidify our plans to expand both organically and through acquisitions. This quarter, we acquired an 80% stake in Wallmeric. They specialize in developing marketing automation technology, combining lead management, online marketing, and sales enablement. With this strategic integration, we want to disrupt the digital sales strategies for our clients. Globan has always focused on helping the world's top brands interact better with their customers. With Walmeric on board and our digital sales studio, we want to bring this full benefit of the digital and cognitive revolutions to improve the sales of new products. Now I would like to share some thoughts on what we have been doing for our clients. All regions have seen growth as we continue to make our mark all over the world. Starting in North America, Globan is proud to be serving the National Football League to help build and launch a new set of apps for connected TVs that will enable fans to best engage and enjoy the sport they love. In the robotic process automation space, Globan is proud to be partnering with Automation Anywhere and the development of their latest enterprise platform, Automation Anywhere Robotic Interface, that provides unique capabilities to end users in personalizing their automation tasks for both the front and back office. Vivid Seeds, a leading online ticket marketplace, is partnering with Globant in multiple digital initiatives, from delivering experiences in the marketplace to creating a data-driven approach for growth. In gaming, Globant continues providing co-development expertise for Ubisoft's latest version for the guitar-teaching music game Rocksmith+. The award-winning Rocksmith franchise has sold over 4.8 million copies already. At Zynga, Globan develops tools for systems for its CSR racing franchise with over 130 million downloads worldwide. Our clients and partners span multiple sectors and disciplines, which brings me to the Inter-American Development Bank. After working with them for several years on their digital transformation journey, we are widening our scope of work. We have embarked on a three-year AMS engagement for Salesforce and ServiceNow towers. With just a few months in, we have begun to see the results with all quality KPIs met, 97% of satisfaction on customer surveys in the organization, and high engagement from business partners and team leaders. This quarter, we celebrated a decade of partnership with Stride, an education technology company that supports more than 2 million students with online and blended learning solutions. We began working with them to create learning experiences and improve their educational platform. Over the years, we have provided tools in areas from data analytics, improving assessment systems, and refining their digital education content. It is great to see the passion in our teams to challenge the status quo. We are also working with the digital transformation with telecom. We have successfully launched a new version of their e-commerce platform. It is a key part of the new digital ecosystem. In the construction space, we are working closely with ETICS in creating a technological foundation of its new division called New Ways. This work is aimed at impacting and reinventing the supply value chain. We are supporting ETICS in their ambition to be a key player in the transformation of the construction industry in the emerging market for off-site, lightweight and modular building solutions. Now, to our geographic expansion. Last month, we opened up our new offices in Montevideo, with President Luis Lacalle Pou in attendance. Over the coming months, we look forward to opening new offices throughout the global regions where we work. I'm looking forward to sharing more of those details with you in the future. Last month marked the seventh anniversary of our IPO, and I still feel like we are just getting started as the market opportunity keeps increasing. According to IDC, the numbers of companies that embrace a digital transformation strategy is up 43% since 2019. With the need to constantly adapt in order to face uncertainty, we anticipate this market to continue expanding. We also see how certain key areas continue to be disruptive and garner more attention from companies. An example of this are blockchain technologies. which are enabling the decentralization of finance while also penetrating in more industries. Particularly, even in the past few months, the tokenization of assets has become an increasing trend. Blockchain is already disrupting the concepts of work, business, and commerce worldwide, and it's just getting started. Digo Tartara, our CTO, will talk more about what we are doing in this field shortly. Similarly, artificial intelligence adoption continues to expand and the AI market is expected to grow by $76 billion by 2025. We're confident that these trends, together with the growth of our market, will allow us to grow fast. As we continue our expansion, it is important to understand that the future belongs to sustainable companies that pay attention both to their P&L, the impact in their communities, and all their stakeholders. Sustainability is an essential element to everything we do at Globant. I'd like to draw attention to our expanding ESG activities under our Be Kind initiative. As we are committed to being a carbon-neutral company by the end of 2021, Globan submitted last week its first carbon disclosure project. With this annual disclosure, we hold ourselves accountable to environmental transparency. We are committed to acting responsibly as we create a way forward into a thriving, sustainable future. In line with this accountability, we are also officially committed to the Science-Based Target Initiative. We have joined the more than 1,000 companies all over the world that are working to limit global temperature rise to 1.5 degrees Celsius above pre-industrial levels. Now let's talk on how Globan has been innovating and working on its signature tools. I'd like to bring my friend, co-founder, and president of GlobanX, Gilbert Englevien. He will share some of the updates of this division focused on our unique technologies and new revenue streams. Gilbert, please.

Thanks, Martin. It's a pleasure for me to be with all of you today. Let me tell you a little bit about GlobantX. We established GlobantX to be the space where we nurture Globant's homegrown innovation, so we can apply it and turn it into exponential revenue opportunities. As we aim to transform our industry, GlobantX is applying AI to augment the way we code, the way we test, we design, we get collectively smarter, we reinforce our team's culture, how we recruit, and how we assemble teams. This is enabling us to achieve scalability into everything Globant does. At GlobantX, we are also exploring opportunities to enable our customers to disrupt their own industries. For example, to enable new conversational channels, as we are doing with our technology-patented solution Fluent Labs. GlobantX is key to continue driving the entrepreneurial spirit that has made Globant what it is today. In addition to this, we believe Globant is a lighthouse for many entrepreneurs pursuing exciting opportunities. Let me go over some highlights of our initiatives. Our patented augmented coding technology, enhancing the coding process by seamlessly accelerating our developers to write better, safer code in less time. We are building a strong leadership team to carry the project forward and have appointed Tiburcio de la Caracoba as CEO of Augmented Coding to make it happen. Tiburcio used to be the CEO of GMR, one of our acquisitions from last year, and he has an extensive track record as a successful founder and entrepreneur. GlobantX will also oversee StartMeUp OS, which many of you know has been key to establishing a strong culture within Globant. Today, Start Me Up acts as a nervous system that creates a high-performing organization where everyone feels part of a strong, aligned team, providing a seamless personal experience to every employee in an environment of high autonomy. The pandemic has represented a huge shift for the future of work. While we still need to create an engaging environment to attract talent and build a diverse and inclusive organization, we also believe that being able to assemble strong organizations in a distributed work environment is key. We have seen how clients like Prisma and many others are seeing in StartMeUp a solution to strengthen their organization culture during these challenging times. As the digital transformation requires a human transformation, I'm excited to continue expanding this operating system to build a smarter future for our customers. Next, to speak about some exciting new studios, I would like to introduce Diego Tartara, our Chief Technology Officer. Diego?