Globant S.A.

Good day and welcome to GloBant's fourth quarter and full year 2024 earnings conference call. I'm 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, .globant.com. Our speakers today are Martin Migoya, co-founder and chief executive officer, Juan Urteague, 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 for 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. 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 like to turn the call over to Martin Migoya, our CEO.

Welcome, good afternoon and hello everyone. We're facing a major transformation. It is a revolution that GloBant has not only anticipated, but has been shaping for many years. With advance in AI, the lines between technology and business are fading. Today is not just a tool, but the core of enterprise reinvention. While many technology players are jumping on the AI revolution, branding themselves as experts without having made any real investments in the field, GloBant has been investing in AI for the past 10 years. This long-term commitment means we are not merely riding the wave of the latest trends, we have developed deep proven expertise in the field. Creating technology that dares to delight is not just about writing code. It is about creating meaningful value in a world powered by AI agents, industry-specific intelligence and human touch. We were building software with purpose, shaping experiences, driving impact and pushing the boundaries of what technology can achieve. Many doubted, but this was not our guide. Vision was. Along the journey, we have worked on projects that redefine the user experience, from game face ID technology at the new LA Clippers into Dome, to the digital ecosystem of Kidia in Saudi Arabia, to the next-generation passenger experience at one of the top airlines in the UK. Our momentum is undeniable. We are no longer just scaling. We are orchestrating an ecosystem of AI agents that automate complex processes, not only in operations but across digital, front-end, backend, digital branding creativity and enterprise functions. At the heart of this transformation are our AI studios. These studios are not just another business unit, they are the epicenter of our re-invention strategy. They are designed to embed AI deeply within industries, leveraging company-specific data, insights from ERPs, CRMs and other transactional systems, and generating synthetic data to train models to learn, adapt and evolve. They represent the boldest expression of what we believe the future holds, a future where AI doesn't just support business, it drives them. Powering this entire ecosystem is our global Enterprise AI platform, the orchestration software that seamlessly integrates and manages all these AI agents. Enterprise AI provides LLM model independence and stability, ensuring that our clients are not locked into a single technology provider. More importantly, it delivers complete traceability of AI-driven processes, offering transparency, accountability and the ability to monitor ambivalent strategies in real time. Enterprise AI is the backbone that supports our AI studios, enabling us to offer robust, adaptable and scalable AI solutions to enterprises around the world. The platform is being implemented to accelerate the software development lifecycle in most of our current projects. We have seen an outstanding growth of AI-related projects at Globant. In 2024, they contributed over $350 million to our revenue, up 110% from 2023. But technology alone isn't enough. Combining branding with technology creates products that are not just functional, but emotionally resonant and culturally relevant. In a world where widespread access to technology leads to commoditized, look-alike products, we advocate for merging creative storytelling with tech development to build products that stand out. At Globant, we believe that brand is tech's prompt. A strong brand should be the foundation for technology, ensuring it reflects the company's core values and creates meaningful connections. This approach ensures that technology doesn't just solve problems. It tells stories, evokes emotions and builds lasting loyalty. This has been the mission driving the growth of GlobantGut, our creative marketing network of studios. Through many smart marketing campaigns with brands ranging from Coca-Cola to Mercado Libre Today, our GlobantGut network represents close to 10% of our total revenue and is showing a strong and sustained growth year over year. All these efforts are combined with Globant entrepreneurial culture. We want to inspire every Glover to feel like they own the place. I'm sure that this is what was behind our performance in 2024. While our peers reported stagnant growth, we broke new records. Annual revenue reached $2.4 billion, up .3% over previous year. Margin also improved. Adjusted operating profit was up by 20 basics points and adjusted diluted EPS grew .5% year over year to $6.40. As we close 2024 and looking back at our first 10 years as a listed company, Globant delivered a 28.3 compound annual growth rate from 2014. In Q4, total revenue reached $642.5 million. This represents an increase of .6% year over year and .5% quarter over quarter. This growth is not just a testament to our resilience, but a reflection of a vision and transformation that goes beyond our competitors. It is the embodiment of our strategy, our relentless pursuit of reinvention and our ability to see opportunities where others see obstacles. Even if we build this AI-powered future, we know that AI requires continuous leadership, technical talent and a mindset that embraces reinvention as a constant state, not an occasional need. Our people define the goals, guide the agents and pivot strategies in an environment of constant change. For over two decades, we have challenged the status quo, often seen as outliers in an industry obsessed with the next quick win. We were not building for the next quarter, we were building for the next paradigm. Today, we are creating a company that is both an established force and an agile changemaker. We have proven that we are capable of reshaping industries and redefining business models. We are not here to follow the curve, we are here to bend it. Now, I'll hand it over to Diego for our technology focus. Thank you very much.

Thank you, Martín, and hello everyone. As Martín mentioned, coupling generative AI with agentic solutions will benefit Globent both as a solutions developer and as a business consultancy. In November, CodeFixer, the AI agent developed through Globent Enterprise AI to fix bugs and already in use by Globers globally, ranked first in the renowned SWE Benchlight evaluation, confirming its exceptional performance. AI agents are being leveraged big time by our industry specific studios to enhance our value offering and are integral to our partnerships. Over the past six months, Globent has successfully implemented Salesforce Agent Force across multiple industries, driving AI-powered automation and efficiency. For example, we partnered with Spain's top flight sports organization to enhance fan engagement, with a real estate developer to optimize transportation bookings, and with an employee benefits management company to improve real-time order tracking. With Google, days ago we presented a new Gen.AI solution for retail. AI retail search and recommendations allows customers to interact with their beloved brands using semantic searches and images as references for what they are looking for. Using Vertex retail API and Gemini, AI retail search and recommendations is designed to enhance personalization, drive conversions, and improve customer services. Also with Google, we recently signed a three-year strategic partner agreement that has positioned us among top 10 Google regional system integration partners. Through this collaboration, we are co-developing solutions and -to-market strategies for key industries including media, retail, HLS, airlines, and finance. Now let me share some of the work we are doing for amazing companies around the world. In Mexico, Globent Gut began a strategic partnership with the Acheo aimed at revolutionizing its e-commerce business. We are integrating technology, data analytics, and creative content to enhance the online shopping experience and boost brand visibility. The 360 scope includes a dedicated data team to ensure campaign relevance, a content team to optimize product visibility on digital platforms, and a retail media strategy aimed at maximizing advertising ROI. This partnership is not just about maintaining leadership but about innovating the retail experience through technology and creativity. In our vibrant new markets division, Globent has partnered with Red Sea Global, one of Saudi Arabia's most ambitious tourism destinations that will be home to 50 resorts, 8,000 hotel rooms, and 1,000 residential properties by 2030. We will create an advanced digital program designed to transform the connected visitor experience. It will be based on an ecosystem that integrates artificial intelligence, IoT, and data analytics. This connected visitor experience will provide intuitive, real-time interactions tailored to individual preferences, ensuring a truly memorable stay. This partnership will pioneer new benchmarks in digital engagement, revolutionizing how travelers interact with destinations. In the health and life sciences sector, we are proud of our growing and transformative partnership with Hollister, a global medtech company. Globent enabled a successful go live for Hollister's Canada business and looks forward to a continued partnership to implement a global business transformation, including a migration to SAP S4 HANA. Ultimately, this means faster database interaction, real-time insight into business operations, and advanced process automation and efficiency. In Japan, we are working with Rezona Bank Group, one of the country's largest retail banks with 16 million individual customers. They chose GeneXus to support the migration of most of the business operations currently performed through ATMs and financial terminals at brick and mortar branches to computers and other electronic devices offering a better and easier experience to their customers. Rezona Bank Group was able to reduce half of its financial terminals through a lean and quick project. As shown by our work around the globe, Globent is leveraging all significant technologies while exploring new ones on the horizon. I suggest you take a look at Globent's latest tech trends report to learn about synthetic humans, quantum computing, invisible experiences, and robotics and more on our vision over AI-agentic solutions. Adding to what Martin mentioned, Globent is in a unique position to craft a new reinvention of the industry with amazingly talented people, an evolving technological offering, and an agile and disruptive culture. I leave you all with Patricia Pomme's RCOO. Thank you very much.

Thank you, Diego. Globent continues to envision its growth through the strong relationships we cultivate with each client, establishing a proven track record of quality delivery, and consistently surpassing their expectations over time. Currently, we have 20 clients generating over $20 million in annual revenue, up from 16 clients one year ago. We have 346 clients contributing more than $1 million annually, 35 more than one year ago. Revenue from our largest client, the Walt Disney Company, increased by a sharp .7% year over year and .1% quarter over regionally. Our most significant growth this quarter came from our New Markets region, encompassing our efforts in the Middle East and Asia-Pacific, where revenue increased by 43.8%, quarter over quarter, and 89% year over year. Year over year, Europe showed growth of 23.3%, and North America at 6.5%, but .7% sequentially, pointing to some acceleration. Latin America showed a .3% decline, but .3% growth in constant currency terms. We are reinforcing our -to-market strategy worldwide in order to maximize the potential of our AI studios, which have been critical in capturing our largest projects throughout this year. Across each region, we are hiring industry-leading talent in key growth sectors that include airlines, BFSI, travel, and hospitality, among others. Our objective will be to provide more tailored solutions to our clients that meld the best from both a technology focus and industry-specific knowledge. Our global revenue sources continue to diversify. North America accounts for .2% of our top line, followed by Latin America at 20.4%, Europe at 17.7%, and our New Markets at 6.7%. Additionally, in Q4, 5 out of 8 industry verticals experienced sequential growth, with BFSI up by 18.4%, travel and hospitality by 17.1%, healthcare by 14.6%, consumer retail and manufacturing by 4.7%, and technology and telecommunications by 2.2%. The essence of Globant lies in our role as transformation partners, collaborating with our clients to drive meaningful change together over time. 2024 saw steps forward in that vision. Our pipeline is strong and continues to grow. Estimated at $2.6 billion in early 2024, it reached a record $3.3 billion by the end of the year. This was mainly driven by our North America division, with the pipeline reaching a record high and bookings growing .2% -over-quarter as of Q4. Similarly in Europe, we are now seeing a strong evolution of both pipeline and bookings activity, with bookings in this region growing by .7% sequentially. The strong backlog of work will drive strong momentum for this region throughout the year. We see the later factors combined as indicators that long-term demand is increasing and should eventually turn into higher bookings and revenue acceleration. In Q4, we surpassed a special milestone of 30,000 Globers throughout the world. Our total headcount now stands at 31,280, a .3% increase over last year, with 29,198 being IT professionals. Our utilization rate is currently at 79.3%, showing a slight decrease against last quarter. Our attrition rate stands at 9.5%. On our path to becoming the world's number one AI partner, we recognize the importance of equipping our teams with the latest proficiency in AI. In December, we launched a new AI Learning Hub, an internal platform that provides essential resources for Globers to access Globant Enterprise AI, our AI accelerator platform, and each AI agent and maximize its use in their daily tasks and projects, optimizing operational efficiency and creating value for our clients. We firmly believe technology is a powerful force for inclusion and transformation. In 2020, we committed to providing 15,000 coding scholarships by 2025 through the program Code Your Future. Today, we are very proud to announce that we have reached this goal one year ahead of schedule. Empowering people worldwide with digital skills, this milestone reflects our commitment to bridging technology gaps and fostering a more inclusive future. With that, I'll turn it over to Juan to discuss our financials. Thank you, everyone.

Thank you, Pato, and good afternoon, everyone. This has been another quarter of strong revenue growth and margin improvement. This strong quarter marks another year of Globant's outstanding performance. Let me go through some of the highlights. Our revenues reached a record level of $642.5 million, up .6% year over year and .5% sequentially within the guidance range. In constant currency, revenue growth stood at .6% year over year and .8% sequentially. We estimate an .5% -on-year revenue growth in organic constant currency terms for Q4. Revenue for the full year was ,415,7 million within the guidance range or .3% over the prior year. In constant currency, revenues for the year grew .2% while the organic constant currency growth for 2024 was 9.8%. This strong growth was driven by the expansion of our service offerings and global footprint with important growth contributions from our AI industry reinvention studio network and our GUT Studio network, which both posted growth above the company average. We delivered a quarter of improving margins. We closed Q4 with an adjusted gross profit margin of 38.3%, up 30 basis points year over year. Our adjusted operating margin at 15.7%, the highest recorded in the past eight quarters, reflected an increase of 40 basis points year over year. Adjusted SG&A stood at .5% and our effective tax rate stood at .1% for the quarter, resulting in an adjusted net income of $78.7 million, with a .2% adjusted net profit margin, up 40 basis points sequentially. Adjusted diluted EPS was $1.75, up 8% year over year, ending at the higher end of our previous guidance. Regarding our 2024 full year performance, the adjusted gross profit margin was 38.2%, up 10 basis points relative to 2023. Adjusted operating margin closed at 15.4%, up 20 basis points versus the previous year. Adjusted SG&A for the year stood at .4% and our effective tax rate stood at 19.7%, resulting in an adjusted net income of $285.4 million, with an .8% adjusted net profit margin. Adjusted diluted EPS was $6.40, up .5% year over year. Our balance sheet remains healthy, ending the quarter with $156.1 million in cash and short-term investments, or $136.5 million in net debt. As of the end of the year, we had $290.7 million drawn from our $725 million revolving credit facility. We have ample liquidity to support our growth initiatives. During the fourth quarter, we generated $101.2 million of free cash flow, achieving a free cash flow to adjusted net income ratio of .6% for the fourth quarter. On a full year basis, free cash flow was $138.1 million, resulting in a ratio to adjusted net income of 48.4%. Now, let's discuss guidance. We will start guiding constant currency, both for the next immediate quarter and the full year, aiming to provide more color into our underlying growth given the current volatility in FX. Regarding Q1, we had already been expecting a more muted start to the year due to lower billable days, negative seasonality and holidays in the southern cone, alongside important project roll-offs in our sports vertical. Additionally, we are now embedding two factors that we previously were not expecting. First, the recent volatility in political and macroeconomic conditions is impacting the demand in Latin America, specifically in Mexico and Brazil. Second, we expect revenues at our top client to be slightly down in Q1, following a very strong investment phase in H2 2024. We are forecasting this account to grow in the mid to high single-digit range for the year. For Q1, we expect revenues in the range of $618 million to $628 million, which represents an .2% to 10% -over-year increase, or a .2% to 12% increase in constant currency, accounting for approximately 200 basis points of FX headwind. For Q1 2025, we expect our adjusted operating margins between .5% and 16.5%. The IFRS effective income tax rate is expected to be in the 20% to 22% range, and adjusted EPS for the first quarter is now expected to be between $1.55 to $1.63, assuming an average of 45.3 million diluted shares. Moving to the full year guidance, and despite the incremental headwinds in Q1, we continue to forecast double-digit growth in constant currency terms for 2025. We see a strong backlog of work ramping up in new markets and Europe, and we are seeing an encouraging expansion of our pipeline in the US. This should lead to a recovery of Q2 and revenues to similar levels to Q4. Then we expect a stronger second half, as usual in our business. On a reported basis, we are estimating ,000,000 to ,000,000 in revenue, which represents a .1% to 12% -over-year increase, or a .6% to .5% increase in constant currency, including approximately 150 basis points of FX headwind. We anticipate adjusted operating margins in the range of .5% to 16.5%. The 2025 IFRS effective income tax rate is expected to be in the 20% to 22% range. Finally, our adjusted EPS is expected to be between $6.80 to $7.20, assuming an average of 45.5 million diluted shares outstanding for the year. To conclude, we are very pleased with our 2024 financial performance, which reflects another year of our unique position in the industry. We are excited about 2025, which will be another year of strong growth with improving margins. Thank you for your continued support, and we look forward to sharing more updates on our growth and achievements in the coming months.

Thank you, Juan, and hi, everyone. As we go through the Q&A section of this call, I will first announce your name. At that point, please unmute your line and then ask your question. Please mute your line after you're done with your question. Also, I will ask you to please limit yourself to one question. So thank you very much. And with that in mind, I will take the first question from the line of Jim Schneider from Goldman Sachs. Jim, please go ahead.

Jim Schneider Good afternoon. Thanks for taking my question. I was wondering if you could maybe comment on the overall demand environment you're seeing on a regional basis. Sounds like things are a little bit stronger in the US and in the Middle East and maybe a little bit weaker, more cautious in Latin America. Maybe talk about the outlook in Europe and maybe with respect to Latin America, can you maybe talk about some of the factors that would actually cause customer demand to start to get a little bit stronger and for them to release some of the discretionary spending? Thank you.

From our guidance, the picture looks quite good. And the demand in the US is strong. The pipeline is strong. In Europe, the business is structuring quite well with massive customers, like a big airline in the UK plus a big bank in Ireland. The things are moving quite fast. Of course, in new markets, everything is to be discovered, which has closed very large contracts there for some amusement parks and for some very large companies. So I'm very positive with the picture in three of the four main markets that we have. In Latin America, the situation is a little bit more stable now. It used to be during 2024 a little bit rocky there because of the political turmoil and different things that happened in Brazil and in Colombia mainly. But I think now that it looks like a little bit more healthy in terms of the pipeline, the conversion. Overall, if I need to say, the big picture is the pipeline is very strong. Our AI-related work is growing extremely fast, 110%. AI is impacting pretty much 100% of what we do with our developers in front of our customers. That's a massive disruption going from creating this transformative experience that requires, of course, strategic thinking, a lot of creative thinking, and of course, deep technical knowledge. But how we create that technology is evolving into AI agents orchestration. Although things for us are pretty familiar, we have been investing on those things like no one else in the space for a decade now. Globally, it's growing extremely fast in those areas. Overall, I would say that the conversion of that massive pipeline that we have across a company became a little bit slower during the last quarter. But we're seeing some acceleration as we speak right now. So I hope that provides a little bit more color to your question.

Thank you for the question, Jim. Our next question comes from the line of Puneet Jain from JP Morgan. Puneet, please go ahead. Your line is open.

Hey, thanks for taking my question. I wanted to ask about your new clients, specifically in the Middle East. How should we think about ramp timing on some of those accounts?

We are ramping up Puneet as we speak. So the idea now is that we have those parks and resorts. Some of them are being built, some of them are ready. So technology will start to roll out as we produce it. It will be a stronger growth during this year and I think much stronger in 2026. These two years will be very strong coming from the Middle East.

What is interesting about the Middle East, Puneet, is that initially we were working on parks, you know, amusement parks. Then we got into hospitality, some hotel chains and other things like that. We're also working on some financial companies and in conversations with some airlines. So little by little we are being able to tap into different industries in the region, which has a lot of potential.

Can you also talk about pricing trends? I'm assuming the wages are continuing to increase. Are you able to get price increase from your customers?

The pricing market is still challenging. We are being able to get some price increases in those projects which are extremely focused on selling more or creating incremental income or incremental revenues from our customers. In the type of cost saving type of project, that's a little bit more competitive. On average, I would say that's going to be another year of neutral to low single digit type of price increases right now.

Thank you so much and congrats for getting 200 million in the calendar year. Thank you.

Thank you very much. Just a reminder if you could leave me yourself to one question please. The next question comes from the line of Maggie Nolan from William Blair. Maggie, please go ahead.

Hi, thank you. I'm curious what you see as the organic growth drivers over the course of 2025 and can you share expectation for what's embedded in the guidance from an organic perspective as well?

I'll start with the numbers and maybe the team can provide some color. You know, the overall growth for the year at the midpoint is .5% in dollars or 12% in constant currencies. We're assuming about 150 basis points of FX impact. The organic constant currency growth that we're estimating is .5% so very much in line with 2024. That growth will mainly be driven by new markets which continues to be very strong. Europe will also be providing good levels of growth. We have already ramped in and expanding some clients. I think that we will start to see an improvement in the conversion in the US. Latam is going to be probably the slowest growing region. There is in terms of areas all the creative work coming from our gut creating network combined with our AI studios. I think that's where the growth will come from. We're excited about what we're seeing in our AI studios, how they're building solutions impacted by AI that might transform many of the processes of our customers. I think that's where a lot of the opportunities in the pipeline are coming. That's in a nutshell what we're seeing the

Thank you, Mario, for your question. The next question comes from the line of Jamie Freeman from Susquehanna. Jamie, please go ahead.

Hi, thank you for the opportunity. I was just wondering how you're thinking about the benefits of automation, how it might be related to the linearity that you're expecting like headcount versus revenue. Any inputs on that would be helpful. Thank

you. Thank you for your question, Jamie. I think that as we evolve in the AI productivity and tools, as we evolve in our software development lifecycle agents, we're having a much better understanding of how this is helping our people to become more active. As I said before, it is present pretty much all over the place. We are doing a lot of things with our AI studios and mainly with our enterprise AI platform, which is like the orchestration software in which you get independence from LLMs. You get traceability of what's going on. You can take a much larger process and cut it in small pieces. We are starting to figure out ways to charge those agents and even the work we do on those agents in a way that is more tied to performance than just effort. That will generate moving forward, like we have been doing with the platform, that will generate moving forward like decoupling from just the people that we have and it will be much more leveraged in the AI tools. We expect that as the LLMs become more and more commoditized, these customizations that are ready to be done, ready to use and connected with the backend systems of the company, so on and so forth, those AI agents' implementations and orchestrations will keep on having a lot of value for our customers and this is how we look at the future, how we see the future. For many, many years, starting and trying to decouple these two factors has been really complicated based on licenses or things that were very difficult to measure. Today, we have tools and we have technology that is expanding our horizon into an unlimited set of opportunities that we haven't seen before. The kind of projects we can do now are much different than the projects you used to do in the past. The type of tasks that our engineers are doing are absolutely different, evolving and growing. It's an amazing moment to have the customers we have and be able to serve them in a totally different way, helping them more connected to how we perform rather than just the effort that is being used for that specific client. I hope that provides more color but maybe you can add something.

I think that pretty much covers it all but I just want to add a small comment with regards to that. I think there's a disconnect because the raw technology in this specific case is amazing, super eye candy, catchy and super powerful as well. Getting enterprise-ready software means a lot of things. It means security, means traceability, means improvements over time, operation, means connecting to the right system, means building the right experience on top. Even though you may see a little LLM performing amazing stuff, building a solution for companies that are enterprise-ready, that work on a regulating environment, that's a totally different story and that's our value. That's where we play.

Thank you both. Thank you. Thank

you. The next question comes from Jonathan from Guggenheim. Jonathan, please go ahead.

Great, thanks for taking my question. Can you talk us through the level of visibility you have in your full year outlook at this point in the year versus that of prior years and how much of your growth is predicated on hunting for new clients versus farming of existing clients?

Sure, thank you, Jonathan. Visibility is similar to last year. I think that the size of the pipeline has improved and has grown quite a lot. Now we need the conversion to accelerate and eventually, whenever that happens, visibility will get a little bit better. As always, the guidance that we provide has something in the middle, which is the most expected outcome. Then there are some scenarios. I would say that on the low end, typically at this point, the main concern is whatever happens in the Latin American business. If there is any kind of deterioration in any other market that we are not seeing right now, the upper part of the guidance implies clearly an acceleration in the U.S. market, which is the main market for us, implies an acceleration in the deals related to AI, which the pipeline is very, very big. There are a lot of small deals, but we still need to see the conversion and to see more or larger deals converting. That's what we have in the upper part of the guidance. In general, I would say that visibility is similar to what we had last year at the beginning of the year.

Thank you, Jonathan. The next question comes from the line of Zachary Azzerman from TD Cohen. Zach, please go ahead.

Hey, thanks. This is Zach on for Brian Bergen. I just wanted to dig into the headwinds that recently emerged that were called out, Disney and Latin America. Is this on the magnitude or are these of equal size? Do you think at this point they are relatively de-risked? On Disney specifically, on pipeline bookings, it sounds like one too slow. What's giving you the confidence there?

You got cut, but I think I got your question. The two things that we were not expecting back in November was Disney ending up much stronger than what we initially anticipated. We were expecting a sequentially flat quarter, but Disney grew once in Q4 relative to Q3 and also on a -over-year basis. Disney ended up at 23% in Q4. There was some acceleration in Q4. Part of it is impacting the Q1 deals that we had. We're assuming around 5M to 10M, more like in the 5M-ish impact coming from there. Then the rest mainly coming from our business in Latam. That's in general the two things that we saw that we were not expecting. In the case of Disney, we were already comfortable with the outlook for the year. We believe that Disney, as we mentioned in the call, should end up mid to high single digit at this point in 2025. In the case of Latam, there was a lot of political noise in Q4. Some of those things are starting to calm, but it's still an open question that we need to see how that evolves for the rest of the year.

Thanks. The next question comes from the line of Sean Kennedy from Mitsujo. Sean, please go ahead.

Good evening. Thank you for taking my question. I was wondering about the top five customer cohort ex-Disney and what was driving some of the underperformance there. There also seems like there's been a bifurcation between some of the larger customers and smaller customer growth over the past few quarters. Are there any underlying trends like sensitivity to the macro, or are they more company specific?

No. Look, I think there is a very clear connection between what is happening in the 2 to 5 and what is happening in our professional services business. When you look at those two, we have two accounts in the top five, which are professional services companies. That sector has not been posting growth throughout this year. There is a kind of a linearity between those two. It's very much oriented to a specific industry. Regarding the second part of the question, when you look at, I'm not sure where I'm putting this but when we look at top 20 accounts, the level of growth is very similar to 11 to the end. In the end, what I'm saying is that it's not just the top 10, it's not just Disney. 11 to 20, which are also large customers for us, have been expanding very nicely in the last few years and also in 2024. When you look at, for example, the number of accounts over $20 million, that number went up from 16 last year to 20 this year. The number of accounts over $10 million went up from 34 to 44 in one year. The number of accounts over $1 million went up from 311 to 346. In general, you see that in all those groups, we are being able to have larger customers in general. That's basically part of the 100 square strategy. That's part of the focus on high potential accounts that can become multimillion dollar in revenues for us. Also, because those are the companies that require and need the type of service that we provide.

Just to add something to that, this year we are reinforcing the 100 square strategy. We are putting in the past that right now we are defining and redefining with the teams, putting the best talent ever that we have in the most biggest account, the account that are really, really strategic for us. This is a work that we have been doing with all our regions. We have been working and defining what are those 100 accounts where we are going to put a lot of effort to continue growing and try to grow even more than what we are growing right now in the 20th first account.

I just found the numbers that I wanted to share with you, Sean. When you look at top one, very strong growth in the quarter, 23%. As you pointed out, the top 10 is impacted by two to five. When you go, for example, to 11 to 20, the growth was 17%. So, there is a lot of big accounts that are also performing very, very well. The issue that we are having in the two to five is very much concentrated in a few names.

Great. Appreciate all the detail you just shared. Best of luck in 2025.

Thank you. Thank you.

Thank you, Sean. The next question comes from the line of Surinder Sint from Jeffries. Thank you.

Just following up on the prior question, you guys have had a lot of success over the last couple of years in terms of the outperformance where you have won some important clients and those clients really scaled. When I think about the growth rate as we look at 25 versus 24 versus 23, is there some sort of an impact that we should be thinking about as some larger project wins from the years past start to scale down that creates headwinds that we should be aware of? It just seems there is a bit more volatility in the P&L the last couple of years towards year end or you are starting to call out more clients where the client maybe starts to wind down or something like that. How should we think about that relative to how it has been in the past?

Maybe if I can start, Martin. I think that the last three years have been different from prior 15 years. In the prior 15 years, pretty much every industry in every region was expanding and pretty much every company was showing expansion. Then after COVID, it was like there are some companies or some industries that have been outperforming other industries. For a while, you had travel and hospitality performing very strongly after COVID. You had the other side, technology companies and professional sectors, right? Technology and telecommunications together with professional services underperforming for the last three years. Now you are seeing a nice recovery in BFSI. Healthcare has been doing well in the last three years. My point is we now have different behaviors in different industries and also regions. For example, new markets, everything grows. You go to Europe, you have some areas that are expanding, other areas that are not. Same happens in the US. I think that we are living in a more volatile market if you want. Sometimes that may have an impact on some of our customers, which are large. I think that if we look at it from another perspective, our company is very diversified. You look at the top accounts and you have companies from media. You have banks, you have professional services, you have travel, you have manufacturing, you have retail. Yes, it now happens what you are mentioning. Maybe one is doing better one year, the other years are a little bit below. But in general, most of those top accounts have been working with us for a long time. Our multimillion dollar accounts may go up and down a little bit in one quarter, but eventually those are the type of customers that we want.

As their needs change and evolve, I would say that it's not about thinking of a single project that never ends. Projects are constantly turning over. And those projects are constantly changing. Also, adapt to the incredible way in which new technologies are being adopted. And global offering is following that. And in many cases, much, we are way ahead of what's going on. So that relationship is constantly being by our capacity of expanding our offering into new areas in which before we were not doing anything. You must think about us as a company that is leveraging in full the relationships we have with our key customers and trying to shape our offer to what's coming and to what those customers are so this is the fuel that maintains our capacity of keep on growing those accounts and those relationships.

Thank

you.

Thank you. Thank you so much. The next question comes from the line of Divya Goyal from Scotia Bank. Divya, please go ahead.

Good afternoon, everyone. So I wanted to actually build onto this theme of client discussion that we are having. Could you help us understand on the AI implementation stage, what exactly are you seeing or hearing from the clients when you speak to them? What is going on in their minds and how are they trying to balance this macroeconomic uncertainty, tariffs with the digital advancements that they are seeing? There are some challenges, some opportunities that they are facing and how is that benefiting or impacting GloBank for that matter? Thank you.

Hi Divya, if I may take this. I think that's actually a very good question because it's a major change that has been happening for the past couple of years. One of the things we're noticing is that the type of demand we're having tends to be a little bit more inclined into the enterprise type of services. This has to do a lot with the operation, fulfillment, etc. and ties a little bit more into the efficiency side of things as opposed to the product and offline side of things. That gets also represented when we speak about AI. AI has been heavily or more heavily adopted on that side, which means enterprise workflows, efficiencies on many different enterprise functions, but not that much on the product side of things, which will eventually have a massive impact. That type of consumption, I think that is one of the key aspects that is preventing us from realizing GloBank's full potential. As you may know, GloBank is well known as a company that is top-notch in experiences and helping clients connect with their consumers. So I think that still needs to materialize. In fact, this is not only our perception of what's going on. I think Salesforce communicated exactly the same about Asian force. It's kind of the pace of the market the way it is today. Just to complement that, another thing that changed with regards to predictability, batching exercises, forecasting, etc., is that in the past, the market thought in the way Martín was describing about products. Products need to be evolved constantly. New technologies appear, opportunities, your competitor has a new feature, etc. And companies tend to do a run rate type of exercise. I need to invest this, and this is a team I will have dedicated to this product, to this line of business, etc. One of the things we have been seeing as well is a tendency to go on a per-mandate basis, which again, it's a little bit of a new approach. We have a lot of new products that get renewed with newer mandates, etc. And that sometimes brings a little bit of gaps in uncertainty, and this is why there's a little bit more volatility.

Thank

you.

Thank you.

Thank you so much. The next question comes from the line of Arvind Ramani from Piper Sandler. Arvind, please go ahead. Your line is open.

Hi, thanks for taking my question.

What I was trying to figure out is, when you think about your commentary, it sounds a lot better than what it was 12 months back, but the growth rates are not necessarily a whole lot better than what it was like 12 months ago. It just feels like your kind of targets don't reflect how positive you seem to be about the overall business.

I think a couple of things. First, when you look at the guidance for the year in organic constant currency terms, we're talking about pretty much the same number that we did in 2024. The total growth of 12% in constant currency, we believe, is a good number because of what I just mentioned about the organic number. I think that the excitement is about what is happening in our industry right now, within our customers. All the different things, the new technologies that are coming, how we see the opportunity for GloVant to engage in many of those contracts to help them transition to these new technologies. Also, the fact that the US has been expanding its pipeline. Yes, of course, conversion needs to accelerate, but when you have the deals, when you see the opportunities, that makes you feel more optimistic. Of course, then that needs to close, and eventually that will translate to more growth. I think that overall, that is the excitement. What's happening in the new market is very exciting as well. Of course, out of a small base, the size of the opportunity, the type of projects that we are winning, that we are delivering. For example, the massive project that we finished with the Clippers, it's a very unique experience that everybody's talking about. A lot of companies are visiting that. A lot of similar or potentially similar customers are engaged in conversations. There are good things happening. All the revolution in technology is usually good for companies like us, and that's where the excitement is. Now, the numbers are where they are, and they are basically very similar in organic terms to 24. I don't know, Martin, if you want to add anything.

No, thank you, Juan. I believe that it's a top-notch performance for the industry. There's a lot of shifts that are happening. With a large company and different types of engagements, I think we are delivering the organic growth in the same level of last year, which was record, taking us to record EPS growth and revenue growth. I think it speaks by itself our readiness to be ready for what's coming on the industry. That's a color I wanted to add.

Thank you,

Garvin.

Thank you, Arvin. Thank you,

Arvin. That will be all for the Q&A section of today. Thank you all. Now I will ask Martin to provide some closing remarks. Martin, please go ahead.

Thank you so much. I'm really looking forward to seeing you next quarter, and thank you very much for your coverage. Bye-bye.