Globant S.A.

Good day, and welcome to Globan's third quarter 2024 earnings conference call. I am Arturo Langa, Investor Relations 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. Kindly refrain from raising hands as we'll aim to address a select number of questions to ensure efficiency. Please note this event is being recorded and streamed live on YouTube. By now, you should have received a copy of the earnings release. If you have not, a copy is available on our website, investors.globant.com. Our speakers today are Martin Migoya, Co-Founder and Chief Executive Officer. Juan Urtiaga, Chief Financial Officer, Patricia Pomies, Chief Operating Officer, and Diego Tartara, Global Chief Technology Officer. Before we begin, I would like to remind you that some of our 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 risk 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 Globan to our peers in the industry. You will find a reconciliation of IFRS and non-IFRS measures at the end of the press release we published on our investor relations website, announcing this quarter's results. I'd now like to turn the call over to Martín Migoya, our CEO.

Good afternoon, everyone. It is great to be back with all of you, and I'm really pleased to share that Globan has had another strong quarter. We have seen top line growth, better margins, increased profitability. I look forward to sharing our results with you. This quarter, we brought in $614.7 million in revenue. That's a 4.6% growth from the last quarter and 12.7% more than the same time last year. We see strong demand in our main sectors with our top clients and across different regions. We're growing our market share everywhere. For 2024, we're expecting the highest growth of any major IT service provider with an estimated of 15% increase in revenue. Our bookings are solid with two of the biggest in our company's history secured in the last six months. For 2025, we're confident about double-digit revenue growth thanks to a strong pipeline and faster organic growth. As I mentioned during our last earnings call, AI is being adopted massively by our customers. They're using AI tools both personally and professionally. It is the biggest breakthrough since smartphones. As AI evolves, customers want more. Companies and governments need to keep up with these enhanced digital products. Last year, companies spent 15 billion on generative AI solutions. McKinsey predicts that spending could reach 175 billion to 250 billion by 2027. At Globan, we're already capturing this opportunity. In the first nine months of 2024, AI-related work generated over $250 million in revenue, up 120% from the same period last year. This growth is partially due to our AI power tools like Agur, Magnify, and GeneXus. With global enterprise AI, we can generate agentic workflows to automate processes in every industry. At the same time, it can be a portal to connect to any LLM to both optimize costs or find the best possible answer between those LLMs. These tools speed up software development and improve the quality and security of the final product. Our clients are benefiting from these productivity gains. Recently, we helped a leading bank to transform their COBOL-based system into Java microservices. In just 105 hours, we modernized over 11,000 lines of legacy code, reducing it to nearly 5,000 lines of state-of-the-art architecture. We aim to expand our leadership as this business grows. Some analysts predict AI applications could add over 1.5 trillion to global GDP by boosting productivity by up to 30%. Organizations need sophisticated consultancy for AI adoption. Three years ago, we established our AI reinvention studios to meet this demand. We now have studios for 15 industries with strong growth in airlines, finance, and connected experiences. For example, digital technologies are enhancing the fun experience at live events. People expect more from their favorite artists or sport teams. This is evident in our partnership with the LA Clippers. Their new stadium, the Intuit Dome, is now open and offers the most advanced fan experience in the world. Fans can enter the arena and buy food and merchandise using facial recognition, which means shorter lines. Our AI technology powers some interactive promotional experiences, allowing fans to participate directly from their seats. It is the first time such technologies are used in a stadium this size. We're excited to bring this concept to more stadiums globally. The Intuit Dome also houses our newest office, keeping us close to our clients. It is just steps away from the basketball court. We're also working on groundbreaking projects in the Middle East, our newest business region. We have partnered with Kidiya Investment Company to develop the Play-Life Connected Experience at Kidiya City. It will be a state-of-the-art digital ecosystem, a global destination for entertainment, sports, and culture focused on the art of play. Play-Life Connected Experiences will offer visitors a seamless, personalized interface to book events and manage itineraries with real-time updates and recommendations. We're growing in our established markets too. In Europe, our fastest growing region in revenue this year, we have opened new offices in Madrid and Milan. These offices will host AI innovation hubs, with Milan becoming our headquarters in Italy. Regarding M&A, we want to be a growth vehicle for ambitious entrepreneurs. We offer a unique startup culture, valuing transparency and autonomy over corporate bureaucracy. In the US, we recently acquired Blank Factor, a specialist in financial services. We're excited to integrate their expertise in payments, banking, and capital markets. They work with six of the top 10 payment processors and major banks. Finally, I invite you to our annual Converge event. This year's theme is AI Disrupt the Light Connect. It is on November 21st, featuring speakers like Gwyneth Paltrow of Goop, Marcos Halperin of Mercado Libre, and Chris Young of Microsoft. You can register via the QR code on the screen. Now, I hand it over to Diego for more on our technology focus. Thank you very much. Diego, please.

Thank you, Martin. For organizations to fully adopt artificial intelligence, they must integrate it into their products, strategies, and cultures. To explore AI's impact on software development, we collaborated with the Massachusetts Institute of Technology for their publication, MIT Technology Review Insights. Findings reveal that while generative AI is modernizing processes, its most significant impact is still forthcoming. Currently, only 20% of respondents consider it a well-integrated part of their software development lifecycle. You can access the full report through the link on the screen. AI agents represent a new frontier transforming software creation. We are utilizing these agents throughout the entire development cycle, from product definition to back-end prototyping and application design, including BA agents and CodeFixer agents. Our studio networks are central to these innovations. We are excited to announce the launch of the digital twin studio within our digital network. This studio aims to enhance design and operations by creating digital twins that simulate and analyze physical processes in real time, thereby streamlining decision making. Additionally, we've introduced the Legal AI Studio, focusing on providing tailor-made technology and AI tools for corporate legal teams, law firms, and public administrations. AI enhances efficiency and accuracy across various legal processes, from data management to intellectual property protection, facilitating digital transformation in the legal sector. Globant is committed to helping leading brands enhance their customer experiences. Our partnership with Formula One is progressing well, similar to our collaboration with FIFA. In addition to innovating race technology and fan experiences, Formula One offers a significant platform for elevating our brand recognition. Regarding our client work, we are collaborating with Topgolf Callaway to drive strategic transformation for Callaway Golf. Utilizing our Magnify platform and generative AI accelerators, we are enhancing productivity and efficiency in quality assurance. Our Globant Gut Network is also making waves globally. In the Netherlands, Gut suggested that Kraft Heinz innovate their iconic product by creating Hegelchup, the first sprinkleable ketchup inspired by Hegel Slag. This agile initiative utilized earned media and organic buzz, generating excitement with a limited supply and a pop-up in Amsterdam. Moreover, we were selected by Stellantis and you to run a digital transformation program across their dealer network in Europe. Our focus is on simplifying processes and automating operations to improve efficiency and reduce costs. Our expertise in the automotive sector and our technology stack, including Globant X tools, were key to our selection. This quarter, within the Enterprise Studio Network, we launched a new product in partnership with Quick Play, enhancing our advanced video search tool developed with Google. This product enriches and tags extensive content, enabling creators and broadcasters to craft dynamic, personalized channels. Lastly, I invite you to explore our new website, featuring an interactive AI assistant that guides you through Globant services, showcasing how we can elevate your organization. With that, I will hand it over to Patricia Pomis, our COO. I look forward to seeing you at the Q&A session shortly. Thank you.