This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk05: 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 Globant to our peers in the industry. We 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'd now like to turn the call over to Martin Migoya, our CEO.
spk14: Good afternoon and welcome, everyone. It's a pleasure for me to be back to deliver this earnings call speech and to share with you how we're progressing on our growth vision. Let's begin with our quarterly performance. In Q3, we brought in $545.3 million in revenue, representing 18.8% year-over-year growth and 9.6% quarter-over-quarter growth. Our revenue for the last 12 months has now surpassed $2 billion, a first for Globant. Over the past quarter, we saw expansion across our key geographies, all of our verticals, as well as among our top clients. We are exceptionally proud to have delivered this market-leading growth, even in a period of global economic challenges. We have maintained profitability, a healthy balance sheet, and free cash flow. We look forward to executing our commercial strategy to increase market share worldwide. As a nod to this expansion, Fortune has recently included Globant on its list of 100 fastest growing companies. Globant was ranked first among peers in the information technology services category, recognized for its revenue, profit, and stock return over the last three years. We are optimistic as we see technology spending continue to lead the global growth story, affecting nearly every area and function of organizations of all sectors. Globant's service offering now encompasses sophisticated technology consultancy and digital solutions, breakthroughs in the creative industry, and from a broad array of AI-based solutions to our expertise in working with world-class enterprise systems. we are in a position to take advantage of the fastest growing areas of the technology sector. Companies across industries will keep investing in technology as new innovations from AI and other trends expand our total addressable market. According to Gartner, worldwide spending on IT services is expected to reach $2.1 trillion over the next four years. Recent surveys from leading financial and consulting institutions also reflect that digital transformation is front and center. As CEOs and the full C-suite continue to prioritize AI, cloud, digital transformation, analytics, CRM, and ERP applications, all of which are core to Globant's key competencies. With our current top 50 clients alone, taking into consideration that global firms spend from 5% to 15% of revenue on technology, our addressable market is close to 100 billion. Our 100-squared program is our focus to take advantage of this opportunity. Artificial intelligence is having its iPhone moment with generative AI and its latest announcements two weeks ago. Gartner forecasts that the market for artificial intelligence services will reach $443 billion by 2027. As I shared in our past earnings calls, at Globant, we are already employing generative AI in our proprietary platforms that help us work better as well as for our clients. AI will be the dominant growth driver in the IT services market. We see two major trends in AI adoption. The first is driven by professionals who use these tools to boost their efficiency and enable their creativity as they produce their own content. This is happening organically. It will be difficult for companies to have an inflexible position to force the adoption of these tools. People don't need us pushing them. They need autonomy and freedom in how they work. As a company, we respect that and recognize that they are responsible for the content that they produce. But companies should provide the necessary tools for their employees to develop and use them if they want to. The second AI trend is being driven by organizations and their need to reinvent themselves. AI can provide solutions that humans cannot achieve on their own in a faster, more meaningful way. At Globant, we work on these technologies through our platforms, each one aimed to accelerate innovation at scale with AI. Examples of these two types of AI are being implemented every day at Globant. With Augur, we make the code more accessible and understandable for companies and developers. With Geno, powered by generative AI, we can match in an efficient and scalable way people with the right skills with their best possible projects, where they will be the best fit. With Magnify, we augment testing for organizations, enabling them to quicken their go-to-market and to launch products faster. With Star Me Up, we help organizations foster culture, predict attrition, and build community. These new trends and global platforms have the opportunity to connect with our expanded value offering. You may remember that we have consolidated our multifaceted expertise into four studio networks to offer end-to-end services and better organize our ideation and execution, the digital, reinvention, enterprise, and create networks. The aim has been to improve collaboration and achieve a stronger, higher quality delivery. In our enterprise studio network, we recently launched the ServiceNow Studio. This new dedicated team will help companies better manage workflows and operations by reinventing digital experiences for employees, customers, and partners. Diego Tartara will expand on its specific portfolio of solutions in a few minutes. Studios from our reinvention network continue to deliver great value as they cross-pollinate knowledge from different digital studios and industries. Our airline studio was able to go over the transformation we provided to LATAM Airlines in the latest leading IATA Symposium, the most important industry event in the globe. Diego Tartara, together with Juliana Rios, LATAM's CIO, described how both companies collaborated to modernize airline retailing. Also, our game studio celebrated the release of the latest editions of titles our teams helped develop, NHL 24 and UFC 5. another proof of a strong relationship with our long-standing client, Electronic Arts. The Create Network continues to advance in its mission of merging creativity and technology, and an example of this is our work with a leading global automotive company. Our customer experience, design, and cultural hacking teams have worked on reinventing its customers' digital experience, testing and iterating new business models via data-driven decision-making. Recently, through a cross-selling strategy, we integrated our experts in business, marketing, and technology from Globant Create to develop a scalable personalization strategy and omnichannel user experience through MarTech at a global scale. This strategic approach is set to redefine the meaning of mobility for users, thus increasing conversion, loyalty, and NPS. Furthermore, we are proud to share our recent recognition by Premios Eficacia, a prestigious award in the Hispanic American market for our work with McDonald's. With the MySneakers campaign, we strengthened its digital customer base, increased its loyalty program, and created an innovative experience with augmented reality. Complementing our wide studio offering, our delivery network continues to build synergies as well. Latin America is becoming enticing again for technology talent due to its expanding ecosystem, relative stability, and valuable proximity to key markets. As the only pure play from the region, and with our global scale and employer branding recognition, we are ambitious to solidify our leadership as the place to work. We already have a presence in the region's top nine talent markets. And now, to our array of platforms that grows in tandem with our widening services and geographic expansion. The disruptive release of ChatGPT one year ago put generative AI into the hands of individual users for the first time. Through GeneXus, which was one of the few platforms included in the latest Gartner Magic Quadrant for enterprise low-code application platforms, Globant is taking a solid leap in applying the advent of this technology to help organizations at scale. We recently launched our first enterprise AI platform, GeneXus Enterprise AI, to help companies to seamlessly interact with relevant and critical data to make better and informed decisions. The new platform is ready to take advantage of OpenAI's recently launched GPT-4 Turbo to build digital products and also leverage all the most relevant LLMs. Diego will expand on this exciting new platform later. This is yet another development from our innovation hub of GlobantX, now expanding in every one of our global regions. All of our platforms are growing with new and existing clients. Augur, FluentLab, GeneXus, Magnify, Navigate, StarMeUp, Wasabi, and Walmeric. As a sports fan, I am very excited about our endeavors in the media and entertainment sector. In early October, we announced the launch of Sportian, the new identity of La Liga Tech. This newly branded entity will provide digital transformation solutions for the global sports and entertainment sector. The consolidated brand is our offering to reinvent the space where we already have over 80 clients in many different sports. Last week in New York, we were also very proud and excited to announce our partnership with Major League Rugby in the United States. Globant has become MLR's official and exclusive digital transformation and tech solutions partner. Globant will build a new version of the streaming platform and leverage data to drive innovation, unlock new ways of growing the game of rugby in the United States, and enhance sponsorship opportunities. I'm very excited to announce that on November 30th, we'll be broadcasting our annual innovation-focused event, Globant Converge. This year's theme of AI Limitless Disruption brings together fascinating leaders, including Salesforce founder Mark Benioff, renowned biographer and media executive Walter Isaacson, NewBank CEO David Veles, and many others. Scan the QR code on the screen and register and learn more at converge.globant.com. As we move forward, we are growing a healthy pipeline that makes us optimistic in 2024. It's been a pleasure to be with you in this last earnings call of this year in which we celebrated our first 20 years. I look forward to sharing with you special moments next year as we celebrate our 10th anniversary as a NYSE listed company. Now let me introduce Diego, our CTO. See you all in some minutes for the live Q&A. Thank you.
spk03: Thanks, Martine, and hello, everyone. Over the past several years, the rapidly changing landscape in technology has brought about many exciting innovations. Blockchain, the metaverse, generative AI, spatial computing, and more. Today, I would like to discuss the advancement of some of these trends and how Globant is embracing them so that our clients can become the early adopters. Interest in artificial intelligence, particularly in generative AI, continues to grow by both individuals and institutions. Among the analyst community, there is a significant increase foreseen in investment. Across all industries, we continue to see high demand for AI-driven experiences, resulting in over $100 million in revenue year-to-date for Globant in projects with AI components. The road to AI, however, has not just led to more direct investment in AI itself, but also highlighted the need to have robust digital ecosystems, and we are seeing companies invest in both – Our leadership in the AI space is allowing us to help clients go beyond proofs of concept into implementing AI-enabled strategies that are driving growth and efficiency. We're partnering with a multinational organization in order to build a company-wide AI strategy that is set to reinvent the way solutions are created for its customers while at the same time generating new internal capabilities that encourage cost optimization and a high level of reusability. Together, we're defining patterns and architectures that enable our teams to deliver value for our customers in a much faster and secure way, going from AI-driven design systems, hyper-personalized workspaces and conversational engines, to initiatives tied to acceleration of support-related responses. We believe that initiatives like these, where we define an AI strategy that puts the customer at the center of tech and business decisions, are key to setting up our solutions as future proven and ultimately lead the way into value creation. We continue to share our expertise and our reinvention vision with our greater community. To articulate how AI is disrupting industries, we released two new applied AI reports, specifically geared to how AI can affect both the marketing and automotive industries. We encourage you to check them out at ai.globant.com. While certain technologies have gone through periods of varying hype, we have a technical understanding of the power that they have to transform experiences and enterprises. An example is blockchain. Beyond the strong media attention, the true value behind the technology is finally emerging. There are several governments that are incorporating this technology into their regulatory future. Take, for instance, Brazil, where the central bank is launching a new digital currency in 2024, as well as a national ID system on blockchain technology. This technology is impacting communities as a powerful and effective tool that enhances efficiency in the sending and receiving of funds, their traceability and transparency throughout the process. In August, we launched Agua, a blockchain-based transparency platform made in collaboration with IOV Foundation and Unison Youth. UNIS and MUTH is using the platform as they provide funding for several social initiatives of small entrepreneurs in Argentina, South Africa and Portugal, among other countries, towards achieving UN's sustainable development goals. Incorporating these systems with the rest of the economy will encourage companies to adopt blockchain themselves to ensure interoperability and transparency. After 20 years of growth, we have been able to go beyond engineering and design and have consistently expanded our offering to become a digital powerhouse, able to work with our clients on all aspects of a complete transformation. Across all industries, the future is rooted in technology, and every part of organizations is being reinvented through technology and data. In Latin America, we supported Organon, a pharmaceutical company, in transforming their go-to-market model. We incorporated best practices from the pharma space, as well as our other industries of expertise, to help Organon transition from a product-centric company to one where innovation goes even beyond their brands. This transformation focused on engaging key stakeholders and adapting the classical pharmaceutical model for future portfolio growth. Globant played a crucial role in this transformation by developing a comprehensive roadmap that included business hacking and technology consultancy. Our goal was to enhance the customer experience and operational efficiency. To achieve this, we prioritized a shift towards digital interactions with healthcare professionals, engaging key stakeholders, strengthening back-office support functions, and looking for synergies through a regional approach. Similarly, we have been working with a global automotive manufacturer. We were able to help them embrace and incorporate what was previously considered technology only for the gaming space, Unreal Engine. With this advent, we are reimagining and enriching the buyer experience. Technologies and experiences that have traditionally been seen as exclusive to one industry are making their way into others, further validating our cross-industry approach. Building a robust digital ecosystem requires, among many other things, having a solid cloud strategy and an enterprise ecosystem with modern CRM and ERP solutions. Our enterprise studio network is reinventing how more traditional IT solutions are implemented. To successfully transform, organizations need the end-to-end process to work cohesively. We are helping a global leader in the life sciences industry as they embark on an end-to-end transformation of their ERP to SAP S4 HANA. This multi-year project spans from solution implementation services to process redesign and organizational change management. We were awarded this contract due to our long-standing partnership with the company, our leading experience in the ERP space, and our in-depth knowledge of the life sciences industry. As Martine mentioned, with over a decade of experience in the ServiceNow platform, we established it as our very own ServiceNow Studio within the Enterprise Studio network. This studio's work encompasses four prime areas, consulting and advisory, assessment and roadmapping to help organizations define and achieve their transformation goals, professional services to help organizations draw value from the platform in areas that include ITSM, workflow, OPS management, and finally, managed services and CIS, including continuous process and app evolution. We continue to see significant demand in cloud migration and modernization. Furthering our partnerships remains key. In August, we were recognized with the 2023 Google Cloud Industry Solution Services Partner of the Year, Award for Media and Entertainment. It's a true sense of pride to win this honor in our largest industry vertical, and from Google, with whom we've been working for 16 years. Reaching another exciting milestone, we were recently recognized as an AWS Premier Tier Services Partner. This is a result of our growing relationship with AWS and it highlights the collaborative efforts of both companies, showcasing expertise and notable success in assisting customers in designing, architecting, building, migrating, and managing their workloads on AWS. Our products and platform strategy is allowing us to provide our customers with a truly differentiated service. As Martine mentioned, GeneXus Enterprise AI is a fully operational, GenAI-powered application that plugs into any enterprise system in a fast, secure, cost-effective, and monitored fashion by creating an agnostic bridge between corporate software and any LLM. AI's true power lies beyond being able to understand human language. Agent-based architectures combined with the power of LLMs will streamline experiences and operation by executing on our behalf. Our GeneXus Enterprise AI already allows companies to quickly build those experiences through secure AI assistants that operate on the user's behalf. An example of the power unlocked by GeneXus Enterprise AI is our work with a very large North American-based company that needed a way to interact with sensitive legal documents from their database safely. We deployed GeneXus Enterprise AI, which not only provided a secure connection to cutting-edge large language models, but also ensured compatibility with the client's SharePoint database. The company now has a smart and secure chat-based system that the legal team can rely on and has made them more efficient. Over many years, Globant has been involved in the smart payment space and has introduced proprietary intuitive services and products that bring people into the digital payment space and expand the ecosystem. We have new developments from our work with a leading payment acquirer that provides IT services to financial entities that include ATM networks, online banking, corporate banking, mobile and security solutions, as well as information processing and service and tax collections. We created a customizable digital wallet for them, capable of the full suite of services required by today's market, from QR payments to online and mobile banking and more. The wallet is fully adaptable to each one of their clients that can now engage better with their customers, including advertising campaigns or promotions that will be displayed within the mobile application, as well as managing communication strategies through notifications to customers. They can also track transactions, manage complaints, and queries from end users through monitoring modules, creating a virtuous circle in the relationship with their customers as they learn more about them and adapt their offering accordingly. Thank you for your attention. I'll now pass it over to Patricia Palmes, our Chief Operating Officer.
spk11: Thanks Diego, and hello everyone. So nice to be back. Let's kick off with our clients and our strategy for expansion. As it is known for some time now, our 100-squared vision guides our efforts to deepen relationships with our clients, expanding our reach to new geographies and offering more services as we grow our collaboration over time. We continue to advance on this path. As this quarter, we were able to deliver our highest revenue ever, with greater diversity in our top revenue sources. We currently have 16 clients bringing in more than $20 million in annual revenue, and we now have 305 clients that provide more than $1 million of annual revenue, 19.6% more than one year ago. Nearly 70% of our revenue comes from publicly traded companies and close to 25% from large private enterprises. We work with 80 S&P 500 companies. To take advantage of the global scale that Globent now has, we have a new global account model with the aim of serving clients across multiple geographies as well as services and platforms, all while focusing the talents of multiple studio networks. Revenue from the Walt Disney Company, our number one client, expanded by 7.8% quarter over quarter. The rest of our accounts collectively grew 9.8% quarter over quarter and 21.4% year over year. Globant is also widening its revenue sources geographically. In Q3, 58.9% of our revenue came from North America, 21.6% from Latin America, 16.5% from EMEA, and 3% from Asia and Oceania. Measuring the success of the relationship and trust we build with each client, the Net Promoter Score, remains a key metric to guide our objectives. Our current NPS of 80 at quarter's end reaffirms our clients' satisfaction and their likelihood of referring us within their organization and their networks. Now, into our headcount. As of September 30th, we were 27,505 Globers, of which 93% are IT professionals, representing an addition of 1,412 IT professionals on a sequential basis. Among these incorporations, we are excited to welcome new globers from Moldova and Vietnam. Our attrition rate for the last 12 months is 9.5%, decreasing 2.1 percentage points versus last quarter and the lowest in our history. The attrition over Q3 was 2.2%. We are committed to keep delivering the best experience for Globers, ensuring an environment of personal growth, learning and well-being at every step of their journey. We will continue driving efficient utilization to manage proper headcount, hiring and attrition effectively. Our current utilization rate stands at 80.5%, and in Q3, we moved to positive net additions on an organic basis. Since Globant's foundation, we've continuously evolved our work scheme, fostering purpose, autonomy, collaboration, and innovation. Today, we continue to make Globant a best-in-class organization, crafting, harnessing, and improving best practices and industry standards. A decade into our journey with AI, we have a great opportunity to apply reinvention at scale with the wider adoption demand we see in the market. We've instituted an AI readiness KPI to ensure that our teams are applying it in line with our strategy. Allow me to highlight a few transformative projects we have embarked on. Our AgilePod methodology has been instrumental in improving the quality, efficiency, and creativity of our solution delivery. Recently, we have achieved a significant milestone by certifying almost 100% of our pods. By leveraging AI, we have successfully enhanced the capabilities of these multidisciplinary teams, increasing their autonomy and decision-making speed. Pods now have the flexibility to choose their own working arrangements, agree on leadership, and utilize a new dashboard for real-time tracking of financial, engagement, and client satisfaction KPIs, among others, fostering ongoing advancement. Additionally, they can set a be-kind objective for each project, reinforcing our commitment to meaningful impact. We are confident that these steps towards Glober's empowerment will not only boost engagement and productivity, but also significantly enhance our service delivery to our clients all over the globe. Gino, the Gen AI-powered human capital partner we introduced last quarter, has already processed over 2,000 talent requests. It not only enables managers to select the best team for a project, but also helps manage open positions and requests, retrieving CVs, scheduling one-on-one meetings, and even creating an onboarding plan if the candidate is a good fit, all within a single conversational experience. This quarter, we also launched Sensei, an AI assistant designed to empower Globers in their professional growth. Sensei utilizes advanced AI to assess and identify skills and provide personalized learning experiences tailored to each individual's current skills, client needs, and future trends. It plays a pivotal role in ensuring our talents' abilities remain updated and relevant. Deployed in specific countries, Sensei has already made over 1,700 assessments and will be available company-wide by year-end. This is just the beginning of an exciting journey that will continue to inspire us to constantly reinvent our company. As Globant, one of our primary focuses is helping Globers to become the best versions of themselves. This is why I'd like to take some time to share how we're driving this vision forward through the tools we put in place to advance our people. Complementing the readiness model introduced last quarter, we launched a fully redesigned talent development assessment. This more user-friendly tool enables leaders to conduct more effective evaluations, identify areas for improvement, and facilitate meaningful feedback conversations. Launched in August, over 95% of Globers have already completed this enriched process. Our open career platform continues to provide Globers with new career opportunities, offering exposure to projects across beloved global brands, multiple geographies, business regions, and industries. In the last quarter, more than 600 Globers entered a new field within Globant. Globant University, our educational platform, also keeps evolving. Learning hours are up 15% just from last quarter. I'm pleased to see that this Globant University is getting recognized by industry leaders. The platform's augmented leadership program won a gold medal at the Brandon Hall Excellence Awards, and Globant's learning framework has been recognized by the Learning Elite Awards program. Our Be Kind initiative continues to make a significant impact on Globers, the community and broader company stakeholders. We believe our future hinges on prioritizing the physical, social and emotional wellness of our people. That's why on World Mental Health Day on October 10th, we launched a unique tool within Star Me Up to promote self-awareness and to help Globers' overall well-being. This tool interacts with Globers using a series of questions and provides recommendations for improvement. In less than a month, over 30% of Globers already utilized the tool. Last quarter, we also completed the fourth edition of the Women That Build Awards. With the support of our global partners, including the New York Stock Exchange, Salesforce, Women Corporate Directors, Udemy, and Kochub, we had an engaging and thought-provoking event with a record 3,100 nominations and over 123,000 votes. From Yalorila Antigua, a rising star addressing an educational gap in the U.S. that affects half a million people, to Jennifer Samaniego, an inspiring leader and data scientist in Ecuador leading a learning network across the country, this award has led us to reconfirm how powerful recognition can be. These global winners will receive their public recognition next December 4th on the floor of the New York Stock Exchange. After holding a total of 10 events around the world with an encouraging response, we remain committed to promoting women's inclusion and fostering career growth in our industry. In addition, we're thrilled to introduce a groundbreaking partnership with the London School of Economics as they officially join forces with our Be Kind Tech Fund. This collaboration amplifies our mission to foster a tech industry that prioritizes kindness and responsible innovation. Also, Life Calling, sharing our vision and passion for positive change, will join us in our mission to support startups that boldly tackle the misuse of technology in our ever evolving society. We have also announced our partnership with Tent, a global business network of over 300 major companies committed to supporting refugees' economic integration. We are actively engaged in offering personalized one-on-one mentorships in the US, the UK, Spain, Denmark and Germany, aiding them in their job placement processes in their new cities of residence. Finally, and as part of our Be Kind to the Planet commitment, in September we were listed by Newsweek in its first-ever annual ranking of America's Greenest Companies. This recognition positions Globant among the top 62 organizations that hold a five-star rating out of over 300 companies recognized for their environmental efforts. I am very proud of how our Be Kind initiative is evolving in each of its pillars and impacting more people globally. With that, I'll hand it over to Juan to discuss our financials.
spk01: Hello, everyone. We're so happy to be here with you this afternoon. We are excited to present our Q3 results, showing strong performance across all of our key measures. I would like to thank every glober and every client for their work and trust. In the third quarter, we achieved another record revenue figure, with total revenue standing at $545.3 million, representing a solid 18.8% year-over-year growth, of which we estimate 11 points to be organic. We continue to grow markedly above our peers and the rest of the IT industry, resulting in clear market share gains. We believe many of the reasons that explain this difference in growth are inherent to Globant. From our startup mentality and our unique culture to our inverted org chart, our pod and studio model, our diversified delivery footprint and global reach, to the innovative and cutting-edge projects we deliver for our clients, we see these factors are a clear differentiator for the company. We look forward to seeing Globant reach new regions and expand its service offerings across various sectors, leveraging the forefront of technological innovation. A long runway of growth lies ahead of us, as previously communicated to the market. Our leading indicators remain positive, reinforcing our outlook for the remainder of 2023 and painting a promising picture for the start of 2024. We are confident in our ability to continue to deliver industry-leading growth. In an uncertain macroeconomic environment, Globant is performing strongly. Stripping out the revenue contribution from Pentalog's acquisition, we delivered a solid 6% organic revenue growth quarter over quarter in Q3. We experienced a rebound in revenues in our top client and other key cohorts, and we saw strong growth across different geographies. We're seeing a progressive uptick in end market demand. During Q3, we grew our business while preserving profitability and generating free cash flow while maintaining a healthy and prudent balance sheet position. We saw strong sequential growth across our geographies and verticals. North America, which is about 60% of our top line, grew 6.5% quarter-on-quarter, EMEA at 28.9%, LATAM at 7.4%, and new markets almost flat. In a similar fashion, we delivered sequential growth across every one of our industry verticals. Importantly, we saw strong momentum in our largest vertical, media and entertainment, which grew 6.2% quarter-on-quarter and north of 23% on an annual basis. Our travel and hospitality vertical, our technology vertical, and our consumer retail practice all posted double-digit sequential growth, expanding by 18.8%, 10.9%, and 12.7%, respectively. Our professional services and banks and financial institutions verticals also grew strongly, by 7.5% and 8.2% quarter-over-quarter respectively. Our top clients' revenue expanded close to 8% quarter-on-quarter. Our top 5 cohort was up 4.4% sequentially, while our top 10 and top 20 cohorts grew by 6% and 4.9% quarter-over-quarter respectively. We're on track with our 100 squared strategy, successfully attracting new clients while also expanding our business with current ones across all areas. We're managing the business with determination and decisive action. Our outlook for the company's future is bright, and we're convinced that we're just beginning our growth journey. We remain committed to profitability and financial discipline. In the third quarter of 2023, our adjusted gross profit margin reached 38.2%, flat quarter-on-quarter, with adjusted gross profit increasing to $208.1 million, representing a 9.2% sequential expansion and a 15.8% year-on-year growth. From a year-on-year perspective, we continue to see some cost headwinds from the appreciation in some of our key currency pairs, such as Mexico and Colombia. However, we continue to execute across those factors within our control. Our adjusted operating margin for the quarter was 15.3%, within the guidance range we provided in August, and up 30 basis points sequentially. Adjusted SG&A stood at 18.3% of sales, down 50 basis points compared to the same period last year. As for below-the-line items, our IFRS effective tax rate for the quarter was 20%, slightly below our guidance, as taxes came in lower than our initial expectation in certain geographies. Our adjusted net income in Q3 reached $64.8 million, with an 11.9% adjusted net income margin, up 10 basis points quarter-over-quarter. Adjusted diluted EPS for the quarter was $1.48, two cents above our guidance, representing a 16.5% year-over-year increase based on 43.7 million average diluted shares. Regarding balance sheet management, as of the third quarter of this year, we continue to carry a net cash position. Our cash and cash equivalents and short-term investments amounted to $219.3 million. As of September 30, 2023, we had a total amount of $50 million drawn from our credit facility. From a liquidity perspective, we continue to have ample funding available through our revolving credit facility. providing us with resources to continue to execute our capital allocation and M&A strategy going forward. Year to date, in 2023, we have produced approximately $67.4 million of free cash flow, a significant improvement from the $17.8 million produced in the same period last year. This has been mainly driven by improvements in our working capital and tax management. As always, our free cash flow generation is much stronger in the second half of the year. Moving forward, let's discuss our outlook for the fourth quarter and the full year 2023. We continue to see industry-leading growth going into Q4. Throughout 2023, we experienced improvement in our discussions with clients compared to H2 2022, and we believe that the short-term outlook remains constructive. In terms of the full-year guidance, we expect our full-year 2023 revenue to be at least $2.094 billion, a solid 17.6% year-over-year growth. This implies revenues for the fourth quarter of approximately $579 million. From a profitability perspective, we expect our adjusted operating income margin in the 15% to 16% range, both for the fourth quarter of 2023 and for the full year. For the fourth quarter and for the full year, 2023 IFRS effective income tax rate is expected to be in the 20% to 22% range. Our adjusted EPS for Q4 is expected to be at least $1.60, assuming 43.9 million average diluted shares outstanding for the quarter. Finally, our adjusted diluted EPS for 2023 is expected to be at least $5.72, assuming 43.6 million average diluted shares for the year. Thanks everyone for participating in the call and for your coverage and support.
spk05: Thank you, Juan, and hi, everyone. So as we go through the question and answer section of this call, I will first announce your name. At this point, please unmute your line and ask your questions. Please mute your line after your question is done. And we also ask you to please limit your question, sorry, to please limit your time to one question and one follow-up. So with that in mind, we will take the first question from Tien-Singh Huan from JP Morgan. Tien-Singh, please go ahead.
spk08: Hi, thanks, Arturo. I hope you can hear me. Everything looks really clean here, so I'll ask about the top client, because we get a lot of questions around that. With Disney up 8%, it rebounded like you said it would last quarter. So I know Disney's also announced some cost-cutting again recently. So does this change your outlook or visibility with this count? What's implied in the portfolio?
spk15: You can share that. Thank you so much. As you know, we have a great relationship with Disney and we grew sequentially on the quarter we are reporting now. We're seeing very good traction in the projects that we have. We don't see any impact on the things that has been announced. And as always, our expectations to keep on expanding and growing with that specific relationship is good. So this is all the information I can provide by now.
spk08: Okay. Fair enough. Just my quick follow-up on the Hectown side. I know the attrition was very low. Utilization seems like it's in a good place, but as we get into the fourth quarter and going into 24, what else can you tell us on the on the headcount management side across hiring, attrition, utilization, attrition, that kind of thing, especially having the impacts on gross margin.
spk09: Maybe I can take the first part and I will then ask Pato to help me with this. So in terms of net additions, I think we have very good news this quarter. After two quarters of sequential declines, we went back to growing sequentially both on the organic side and also when we add the team that came with Pentalog. So I think it was interesting to see this change in that trend, which we expect to continue into Q4. We expect, again, organic growth in terms of net additions in the fourth quarter. As for utilization, you know, it's running at around 80.5%. uh it's still below our historic numbers you know we used to run between 82 and 84 uh and and that's where we target to be right it's gonna take some time uh but eventually you know we plan to to get to those levels in terms of margins uh you know we believe that we are still being impacted by effects in Latin America. You know, that trend has not changed. We are seeing a very strong Mexican peso, very strong Colombian peso, very strong Chilean peso. So we expect our gross margins for the short term to be at a similar level where they are today. I don't know, Pate, if you want to tell a little bit about hiring. Yes, of course.
spk12: In terms of attrition, I mean, we are the lowest. And I think that is, of course, the market. I mean, we have seen a stop from the competitors in terms of the hiring. And we keep growing. And, of course, about the value proposition that Globan is bringing to the table. It's really interesting for the new generations, for entrepreneurs. for the IT sector. We have been working a lot in the last couple of years, as you know, about the value that we bring into the table, the experiences that we are bringing with all our Glovers in terms of upskilling and reskilling, in terms of how they can experiment their offices. Now we turned offices into hubs, so the hubs are these social places where they can connect with other Glovers, and we are seeing a really grow impact there. I mean, it has been amazing the experience that we have been in the last couple of months in terms of how the offices and these hubs have been reinvented and it's given our best results there with the people. So I think that it's a combination of everything. We keep growing our businesses. The net growth is keeping up and we are expecting the same for Q4, of course. And I think that that is also related with experiences that we're bringing.
spk08: Nice work, guys. Nice job. Thank you.
spk12: Thank you.
spk05: Thank you, Tinsen. The next question comes from Ashwin Sivakar from Citi. Ashwin, your line is open. Please go ahead.
spk06: Thank you. I hope you can all hear me. Yes. Yes. Hi, Ashwin. Hi. Let me add my congratulations on the quarter. Good job here. I think the leading question for most investors really is trajectory and nature of demand. So that is a backdrop. I was hoping you might be able to maybe discuss relative demand across each of your four studio categories. It is enterprise, which I think focuses on productivities that may be growing faster versus, say, create, which is more about Are you seeing patterns that might help us figure out which way demand is going?
spk15: I see that demand is like this year. I mean, one thing is a trend that we will see long term, right? And in that aspect, we see that every day all those batches will be more connected. and more integrated. So our obligation is to provide our customers with the necessary tools for them to execute the whole process from the idea creation to the integration with the backend of their companies to how we push those ideas into the public and how we make it known. and how we create, how we code, how we create, how we extend and how we expand a specific idea. That's the longer term vision. So you will see us doing every day more and more things to try to tackle and provide all that broader set of services for our customers. All of them are spending money on marketing, on enterprise, on digital, and of course they're spending money also on the reinvention of their business with our reinvention studio. So all of those budgets are being tackled by the services that we are providing. Now, talking more short term, we have seen good growth on the enterprise side. We have seen good growth on the digital side. And as a new segment, like, you know, the marketing segment with the acquisitions we did plus a lot of organic growth has been pretty healthy for us. Good numbers on the acquisitions we did at the beginning of this year. And we are seeing good demand there. So I cannot say enterprise right now is stronger than digital or stronger than marketing because they are growing in a pretty...
spk06: would say comparable similar way thank you juan do you want to add anything there okay okay no that's that's good to know um a second thing i was hoping uh to maybe get an update on uh on the brazil investments that uh that you're making uh just in terms of organization local leadership hiring trends and is the demand for brazil talent is that more from local brazil clients or also a lot, is also coming from say North America?
spk15: Brazil for us is an important place and we have been investing a lot in Brazil. We have demand from local customers and also some of our international customers are being served also from Brazil. So we have both of them. Predominantly we have local customers. I mean the operation in Brazil is more oriented to serve our local customers. But we're progressing a lot. And, you know, we have very good customers, a couple of very good acquisitions that we did that are performing great. The Brazilian market in general is structuring well, although it's not as fast as the Mexican market, for example, but it's structuring quite well. So we have big expectations for what's going to happen with Brazil in the next year. And by the way, our leadership for the region is based out of Brazil. So we're very happy with that, and we expect to keep on developing the network, the influence that we have on the technology space also in Brazil, and we'll keep on thinking on how to add more things on the marketing side, on the digital side, on the enterprise side.
spk09: Maybe if I can add there, you know, Ashwin, when we started our Brazilian operation, probably 90% of the team was working for local customers. Today, you know, so 10% maybe was working for the U.S. and other markets. Today, you know, as Martin said, you know, we are getting very close to the 50%. You know, half of the team working for local customers, the other half fully integrating into the global studios and working for offshore customers. So that has been changing. We now have over 1,200 employees in Brazil, and the management team for the LATAM operation is based out of Sao Paulo.
spk06: Got it. Thank you, guys.
spk09: Thank you.
spk06: Bye-bye.
spk05: Thank you, Ashwin. Our next question comes from Jason Kopperberg from BOFA. Jason, your line is open. Please go ahead.
spk04: Hey, guys. Thanks for taking the question. So I know you're maintaining the revenue in the EPS outlook here. I think maybe the latter could sound like you did a little bit better on tax than you expected. I know that the margin expectations are coming down a little bit. So I'm not sure if that's just FX. Maybe you can comment on that. And just in general, as we think about general margin range going forward? I think you typically target 15 to 17 this year. We're kind of in the lower half of that, but just more forward looking. Can we still think about the upper half as being plausible or are there other things that have changed in the business?
spk09: Yeah, I'll take that one. So a couple of comments. And thank you, Jason, for the question and also for, you know, being a new analyst covering our company. You know, in terms of full year numbers, you know, we guided about 18% year-over-year growth or 16.6, sorry. 18 is the fourth quarter. As we know, that is three, four, five times the average of the industry. So we're really, really happy with that level of growth. When we go and look into margins, as you pointed out, we are now in the in the lower end of our historical 15 to 17 percent actually more like in the 15 to 16 percent i definitely we definitely see the opportunity to scale and and to get back not just to 17 but over time even above that number but in the short term given all the the pressure that we have been receiving from from the effects plus now some of our competitors and some of the competition being very aggressive on the pricing front. And we have to compete, of course, and keep on winning deals as we have been doing. In the very short term, we think we're going to stay in the 15% to 16%. But, of course, definitely there is a lot of room to grow again our gross margin eventually, but it's even more clear at the SCNA level. We can definitely run this company as we keep on getting scale with lower SCNA. So the short answer is yes, we do see the 15 to 17 as a mid and long term very clear and very achievable target.
spk04: And just as a follow-up, your qualitative commentary around does sound encouraging. Sounds like there's been an uptick here since last quarter. I know you won't guide 2024 until the fourth quarter call, but just as we think about Q1 modeling, is there any type of range of quarter over quarter growth on the revenue side we should be thinking about for Q1, just based on what you're seeing in the
spk09: the pipeline and the backlog and what you're hearing from clients thank you yeah we are we have some positive one-offs in the in the fourth quarter so we do see we definitely see a strong 2024 uh q1 would probably be a little bit below what we are showing in q4 and then we do definitely see of higher growth in the second quarter and going forward. But I think it's still early to put a number out there. But we are optimistic about next year. The conversations with customers are solid. We are having some large deals starting in the four regions where we operate. So we are very optimistic. But again, it's still early and even though we are ending the year On a high note, I do see some things that are, you know, kind of positive one-offs in the fourth quarter, which are not going to happen in Q1. But Q1 will still be, we're going to see growth and we're going to see more growth in the second quarter and onwards.
spk05: Thank you.
spk09: You're welcome.
spk05: Thank you, Jason. So our next questions come from Moshe Katri from Wedbush. Moshe, please go ahead. Your line is open.
spk00: Hey, thanks. Very impressive set of numbers. So the first one is actually on E-Wave. That was acquired, I believe, in November of 2022. The intention here was to focus more aggressively on APAC, Australia. Maybe you can talk a bit about the integration and some of the traction that you're getting in your pipeline from that specific region.
spk15: Yeah, I would take that. We are seeing very good traction. That region for us is not just Australia with EUA, but also Japan, Singapore, and some other countries close by, like New Zealand. And it also includes all the Middle East, you know, and Middle East, including Saudi Arabia and Abu Dhabi, I would say. mainly, and Dubai, sorry, mainly. So those things are seeing like a lot of growth, organic growth happening right now. We got awarded many very important projects in the region. So we're happy to report that this is progressing quite well. Maybe one more thing to add. So you're getting that traction.
spk09: Yeah, one more thing. Moshi, we have now The ability also to expand in the Philippines. We have the ability to expand in Moldova, in Vietnam, in other places in that region, which, you know, it's always great, right? Because, you know, this is a game where, you know, we need to have a global delivery footprint. And, you know, in addition to India, you know, which is our main and most important location out of Asia, we now can also tap into other countries in the region. And I think that's also important.
spk00: Okay, great. And there's a lot of talk about, obviously, the platforms that you're launching. One of them that I actually got to know pretty well during the past few months is Wasabi. And actually, I spoke to Tamara that attended Money 2020. Obviously, that's a wallet as a service platform. Maybe you can talk about some of the traction there and maybe in general. maybe talk about some of the potential revenue contributions that you're getting from those platforms that you mentioned also during your presentation. Thanks.
spk15: I will take the second part. I will let Diego to take the first part of Wasabi. The contribution is interesting for this year. I think among all the platforms, we're going to be contributing a significant amount of money, growing fast. And I would say that... the pipeline and the capabilities of Globan integrating these platforms into our offer in front of our customers has progressed immensely during this year. So this is from the qualitative part in terms of the contribution. And one more thing in terms of the qualitative relationship between customers and platforms is that it's serving as door openers in many customers that we don't have to start conversations, to start kind of small deals that then could progress into something much deeper. So I think that's the perspective that we are seeing. It's taking us, of course, a lot of effort and a lot of, I would say, focus on that, like generating new compensation programs for the global sales force to get aligned to that. But we are happy with the progress. So, Diego, I don't know if you want to talk a little bit about the Wasabi program.
spk02: Sure, definitely. What's interesting about the platform is that it's actually an enabler for a new business model. There are several companies that are trying to expand their business. Typical case is, I don't know, a telco, right? The business of providing just infrastructure and connectivity is not enough. So they are creating an ecosystem of services that go on top of that. So having Wasabi as their own wallet and a payment method and start expanding that ecosystem is actually a model that a lot of companies are actually implementing. It's creating a lot of traction, especially in Latin America, where the unbanked sector is higher. And we also have connectors for the typical payment gateways here. And that's why... Wasabi becomes super interesting. It's super fast to implement. It has already the connectors, and you get your system up and running very fast.
spk05: Thanks. Thank you.
spk15: Thank you.
spk05: Thank you. Thank you, Moshe. So our next question comes from Brian Bergen from TD Cohen. Brian, please go ahead. Your line is open.
spk13: Hi, guys. Thank you. Can you comment on the demand and the contracting behavior they're seeing specifically among technology and telecom clients? It looks like you have a pretty strong quarter here. Just not sure if Pentalog influences that at all.
spk09: Yeah, I'll take that one. So we had a recovery organically. So it grew sequentially after a few quarters of sequential declines, if you want. So we did see a recovery. And Pentaloge on top of that also helped. So I think it was 11% sequential, if I'm not mistaken. 10.9% sequential. Out of that, about five was organic, sequential growth, and six came from Pentalog. And I think what is interesting here is the conversation is not anymore about cutting, cutting, cutting, cutting. Now you have a mix of customers. Some customers are going back into, okay, we've been cutting for two years, now we need to keep on investing, building features, building products, while you still have others that are a little bit more wait and see. But it's not anymore like it was in the second part of last year and the first part of this year, where 100% of tech companies were somehow reducing investments or reducing budgets. You have already started to see a number of them changing that trend, and that's what you see in the numbers.
spk13: Okay, that's good to hear. And then the follow ups on Globe and X. So I'm curious if you've considered selling any of these solutions entirely, or perhaps bringing in a third party investment partner like a JV just to accelerate scaling or just to monetize in a different way?
spk15: Yes. Yes, I will provide more color, no worries. Yes, we're thinking about that. I mean, we believe in autonomy and autonomy must be reached in some way. And we believe in external investors helping us with our own platforms and trying to... I mean, the platforms that we're creating are extremely relevant for what's happening on technology and that attracts, you know, external investors. So now it's about how we provide like a good place for them to be and invest together with us into the creation of those kind of spin-offs or something like that. So this is how we are seeing moving forward. It's a very clear vision we have. I mean, we are taking our time to execute that and to see how those things are going. But yes, it's very clear on the agenda. Thank you. Thank you so much, Brian.
spk05: Thank you, Brian. So our next question comes from Kate Cronstein from William Blair. Kate, please go ahead. Your line is open. I think you're on mute, Kate. Sorry.
spk07: Yes, I'm on mute. Good. Great. Hi, everyone. This is Kate on for Maggie. Congrats on the nice quarter. My first question is, can you talk about Pentalog's performance during the quarter and how it's performing versus your original expectations?
spk09: So I'll take that one. So in this quarter, we grew 9.8% sequentially. Let me get the right number just in front of me. Yeah, we grew 9.6, 9.8, whatever. Okay, out of that, 5.5% was organic sequential growth, and the rest was brought by Pentalo. You know, the initial few months of having Pentalo into the company have been great. You know, we continue now We now have a more meaningful operation in France. We also have definitely a much bigger team out of Romania, which is their main development center that Pentalog had. And we also are in contact with some of their top customers which are very large manufacturing companies, very large professional services companies, and very large tech companies. So, all in all, you know, initial months of integration, of course, it's going to take more time, but we have positive news coming from there.
spk12: Also, in terms of the integration there, I mean, the team, the leadership team of Pentalog have been fully integrated into the Europe region. And they're working together in many, many clients. We're expanding our offering also with the force that Pentalog bring to the table. And also, I mean, opening more doors in the existing clients. You know that one of the strategic reasons of Globan is getting deeper and deeper into the strategic clients, into the clients that we really want to be very meaningful, and we build partnerships with them. So I think that having this kind of footprint there has been very amazing. So we are very, very happy with the things that are going. Of course, we need to continue working together in order to keep growing. and doing much efforts in the Europe area.
spk07: Great. Thank you for that caller. And my follow-up question would be, can you guys talk a little bit about the demand we're seeing geographically? I know last quarter, your comments around the US and Europe were definitely more positive than what your peers were seeing. So any commentary on that would be helpful.
spk09: Maybe I can start and then I can ask Martin to compliment. But I think this was a great quarter because when you look at the three main regions, Europe, LATAM and the US, they all grew sequentially and year over year. At the same time, when you look at all the industries, all of them grew sequentially and all of them grew year over year. When we look at top one customer, we went back to sequential growth. When you look at 2 to 5, 6 to 10, 11 to the end, they all grew. So I think from our revenue point of view, this was a very interesting quarter. And looking and going forward, you know, again, we are seeing positive news coming from the US. Still not booming like it used to be, but we're back into growth mode for a few quarters already in the US. And I think that the opportunity is there. It's a massive market. We have the best companies out there as customers. Our portfolio in the US is amazing. And the deals that the team is currently working on, I think, are very interesting because they're going to give us scale. They're going to give us the opportunity to keep on expanding.
spk15: our operation in the u.s and the only thing i want to add to that to that comment is um i think this is a market share war i mean this is what's happening right now and uh global has been very successful you know uh fighting that battle of course we wake up every morning and we win and lose but at the end of the day we we won't loss we want more than what we lose so um It looks like, I hope, and it looks like next year will be slightly different because investments will be a little bit, you know, different once the interest rate is stable and no news are coming there and people know how much money cost, then it will be easier for budgets to go back into the other mode. But this year, 2023, has been a massive battle on market share. So... This is why we are seeing Globan growing higher than our peers. And I wanted to point this out because for me it's very important to all the market to understand which is the situation now and why Globan is growing faster.
spk07: Great. Thank you all.
spk15: Very welcome. Thank you so much.
spk05: Thank you, Kate. So our next question comes from Divya Goyal from Scotiabank. Divya, please go ahead. Your line is open.
spk10: Good evening, everyone. So, Arturo, can you hear me okay? Yes.
spk05: Yes, we can hear you, Divya.
spk10: Perfect. So I wanted to actually elaborate on this question of the geographic growth here. So this quarter, North America, from what we see, grew by approximately 8%, and Europe obviously grew sizably by 96.5%, and that includes the pentagonal growth. Could you provide some color on how exactly should we expect the next few quarters to be? going forward, especially considering where the markets have been across North America.
spk09: Overall, I think for the next quarter, I think that North America and LATAM and Asia and Oceania will drive the growth, whereas Europe will be a little bit more stable. And then looking into next year, you know, as we speak currently on the budget for the year, we are expecting growth in all regions. But short term, that's the answer. And again, for next year, we expect all regions to contribute to the growth of the company.
spk10: Juan, just to confirm here, do you think it will be possible to continue to maintain the growth in this high single digits for North America just because of how important that segment is for the company?
spk09: Yeah, we definitely will be looking for more than that for next year.
spk10: And just if I may ask a follow-up on the client mix, could you help us understand what is the client mix broadly for the company? Do you see yourself expanding into the enterprise clients a lot more, or is it a fair mix of enterprise, mid-market, and the small-medium business clients?
spk09: No, we will always, I mean, we have a strategy that we call 100 squared, which basically means that we focus on companies that have the potential to generate $100 million over time in revenues. And by definition, you need to go to large companies, large scale companies, which are investing, you know, large amount of money in technology, in marketing, in enterprise, and across all those areas. So our number one, our typical customer is the big company. Of course, we have a big number of medium-sized companies as well. And in terms of small companies, what we like to work with those small companies that are innovating, that are creating new things, new technologies, and somehow we want to get involved in those projects as well. But that's not the target customer. We're not going to build a $10 billion revenue company with very small companies. That's impossible to achieve.
spk05: Thank you. Thank you, Divya. So our last questions of the day come from Surinder Singh from Jefferies. Surinder, please go ahead. Your line is open.
spk16: Thank you. So I'd like to start the question about just the there's mention of a new global account model, and potentially the way that you incentivize the Salesforce, just any additional color there that we should be aware of? And what does it really mean to have a new global account?
spk15: I committed that based on the global next incentive plan that we that we created. And for years, we have had like, like a a problem like matching, I mean, nothing changed, but the problem like matching the amount of revenue that Globan creates compared to the amount of revenue that platform creates and how that gets like disproportionate, right? So in general, you know, then if you include that in the quota directly, then it's not that meaningful. So we change the way to understand when the bonus get triggered uh using a rational which is different in terms of when they sell platforms or when we do cross-selling so on so forth so that was my mention just to say that got it i know it was clear but no thank you um and then i i guess in terms of there's been a lot of discussion or the focus has been on ai um yeah in the commentary
spk16: where have those conversations progressed to at this point? Obviously there's been a lot of proof of concept work. Do you see anything advancing to the next stages? And then does it even make sense to kind of talk about or separate AI as I'm assuming you're solving business problems. And the more we go forward in time, I assume all solutions at some point, you know, incorporate. Yeah.
spk15: Yeah. Look, I will let Diego, but for me, the amount of revenue is already meaningful. I mean, it's not that it was at the very beginning of the year that was not something important for the company. Now it's something that makes sense. On the other side, we still see that all those projects are still composed by exploratory projects. We're seeing conversations starting to progress a little bit more. But the vast majority of our revenue created there are by small projects in many different places. And pretty much all of them connected with generative AI. And I know, Diego, if you want to add some color to that. Yeah, definitely.
spk02: I think I'm going to do a slight correction there. we're not actually doing that much proof of concept. Even though it can be a stage, you know, to release to the next stage with the technology, we're doing projects with a moderate spend that have high ROI, which is quite different. We're doing productive type of work. So there's a lot of work of, I don't know, rack systems like document retrieval, augmentation, et cetera. where generative AI plays, it's amazing the results you get. Those are clear examples, you know, low-hanging fruit where definitely companies can get a lot of value out of a moderate spend. The change we're seeing, and this is actually interesting, is that we are working at least with three clients with a higher spend where they said, okay, I know there's a ton of things I can do with AI. So what if we create a team and we have a data strategy and we have several trucks where I explore different products as ones. So the spend is bigger. They have an actual commitment. Still, the projects within them are small, but the ticket in terms of the project overall we are executing for those clients is bigger. So just to be clear there. And with regard to what you mentioned about the scope, yes, we're solving, definitely solving business problems. However, there's a thing about the experience that might actually change all. And if you connect several of the trends that are happening in the vision pros, you know, augmented and mixed reality, et cetera, et cetera. If you've used Whisper to create a conversational interface with some of the system, you can start to envision that there could be a lot of entry points into the digital experience in the future that is through AI agents and conversational. And that changes everything. A lot of things, a lot of things, lots of opportunities for us further down the road.
spk05: Thank you, Surinder. So that will be it for the Q&A section today. Thank you all. I will now ask Martin to provide some closing comments. Thank you, everybody.
spk15: Thank you very much, guys, for keep on following us, keep on covering us and keep on supporting us. So looking forward to see you next quarter and extremely happy to have any follow-up questions. Thank you so much. Bye-bye.
Disclaimer