Globant S.A.

Good afternoon and welcome to Globant's first quarter 2026 earnings conference call. I am Arturo Langa, Investor Relations Officer at Globant. All participants on this call will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded and streamed live on YouTube. By now, you should have received a copy of the earnings release. If you have not, a copy is available on our website. Investors.Globant.com. We will begin with remarks by our Chief Executive Officer, Martín Micocha, our Chief Technology Officer, Diego Tartara, and our Chief Financial Officer, Juan Urtiaga, followed by a Q&A, where they will be joined by our Chief Revenue Officer, Fernando Matzkin. 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. 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 will now turn the call over to Martin Nigocha.

Good afternoon everyone and thank you for joining us. We are standing at the beginning of the most important transition the technology services industry has lived through. This nearly $2 trillion industry is being rewired in front of us, and the signals coming from the AI ecosystem and from the largest software companies are all pointing in the same direction. The influx of capital, the need for the right talent, and the need to deploy cost-effective AI solutions quickly has never been greater. We have been providing AI solutions to some of the world's most important companies for more than a decade. Globant was built for this moment. For 23 years, we have been building deep engineering capabilities and a profound understanding of our clients' businesses across more than 1,200 customers. We have built a strong AI native services practice on top of that foundation. Enterprises do not need just models. They need AI native services, delivered by AI agents, supervised by humans, driving their agentic transformation. That is exactly what Globant has been executing since 2025, and it is exactly what the market is now validating. This is our moment, and we are entering it from a position of strength. As I meet with our customers around the world, their need to deploy AI solutions that add value and transform their business has never been greater and strengthens my conviction in our innovative business model. This is further supported by the convergence of the most influential voices in technology. Sequoia Capital, through Julian Beck, is calling services the new software, noting that for every dollar spent on software, roughly six are spent on services, and that AI lets enterprises buy outcomes instead of tools, with autopilots replacing copilots. and meaningfully different unit economics. Satya Nadella is calling 2026 the year agentic systems start to reshape how enterprises consume software, with the boundary between software and services gradually narrowing. And capital is following the thesis. This Monday, OpenAI launched a $4 billion deployment company, and one week earlier, Anthropic launched a $1.5 billion enterprise AI venture with a different group of PE firms. The two most valuable AI companies in the world are putting capital behind delivery, not just behind models. We are proud to be an open AI partner since 2025, and every dollar of capital flowing into this layer expands the market for the model we have already built. Q1 2026 revenue came in at $607.1 million, above the high end of our guidance. We are reaffirming the midpoint of our full-year revenue outlook while raising the lower end of the range. narrowing our guidance with greater confidence in our trajectory. Importantly, Q2 guidance returns to sequential growth, with the upper end of our guided range translating into year-over-year growth. Q1 appears to mark the trough of this cycle, and we see Q2 as a meaningful step toward a healthier trajectory. Free cash flow was strong and operating margin held within our guided range. Our pipeline remains healthy and continues to build with strategic AI-native opportunities we expect to convert through the rest of 2026. On capital allocation, our original share repurchase program announced last September was completed during Q2, and our board has now authorized a new share repurchase program of up to $125 million over the following six quarters. representing close to 7.5% of today's market cap and close to 15% of market cap in aggregate between the two plans. The program will be executed at management's discretion, balanced against our investment priorities, including the continued build-out of our AI pods business. We are committed to returning capital to shareholders because we believe Globant is undervalued relative to the trajectory we see in our pipeline and in AI pods. A year ago we announced the shift toward AI native technology services on top of two decades of engineering and industry expertise. Our core business remains the foundation of the company and the AI native layer is its natural evolution. Our AI studios are progressing nicely layering on non-linear revenue, incorporating talent, sophisticating our offering, and getting closer to what our customers need. For each industry we serve, we are getting deeper. Our global delivery capabilities are helping our clients run the AI transformation they need, with greater leverage, better unit economics, and a more strategic seat at the table. Critical differentiators of our enterprise solutions are model independence, and token sovereignty. Our clients are never locked to a single AI provider. Our platform roots intelligently across more than 140 models, giving enterprises the freedom to adopt the best available technology as the landscape evolves. And every token consumed stays within the enterprise's own governance. Their data does not train third-party models. Their institutional knowledge remains entirely their own. This is particularly beneficial for many of our innovative clients concerned with their intellectual property in highly competitive environments. Our answer to the agentic transformation is the combination of two things, our AI pods and our forward deploy engineers. The AI pods are AI native service units, each specialized by task and by industry that deliver outcomes instead of effort. The forward deploy engineers are the human layer that lands inside our customers. embeds AI pods into their reality and drives the agentic transformation from the inside. The annual recurring revenue of our AI pods has reached $32.8 million as of March, with strong growth versus Q4. AI pods is a young, fast-compounding practice in our portfolio, and the percentage growth rates we are seeing at this stage reflect early-based dynamics that will naturally moderate as scale builds. We have already incorporated the AI pods business model in 40% of our top 20 revenue-generating accounts, up from 30% from last quarter. The AI pods pipeline stands at $352 million, including a clear path to coverage in 70% of our top 20 clients. Gross margins on this model continue to run materially above our blended company gross margin. As AI pods grow as a share of our revenue mix, their structurally higher margin can begin to contribute to our blended margin profile over time. AI pods and AI native services are an important evolution of how we deliver value and a meaningful growth lever going forward. Within our digital studios, data and AI, which includes core AI deployments such as NLP, analytics, facial recognition, machine learning, and data science, is now our second largest studio by revenue right after engineering. Both studios are growing markedly above the company average, with data and AI growing north of 25% year over year and engineering in the mid-single digits. This growth mix reflects the priorities shaping enterprise technology investment today. AI is present in 100% of our pipeline. Every project, without exception, incorporates it either as a core element or as a satellite component. Within that, 26% of opportunities are AI core, a figure that rises to 32% when looking only at deals originated in 2026, reflecting the accelerating shift in how clients are coming to us. We are particularly proud of the evolution of our revenue per Glober. As of Q1 2026, we are run rating a level north of $90,000, representing 8% year-over-year growth. This has been supported by the steady expansion of our AI pods business and the AI tooling we have embedded into our delivery. This is the structural signature of a company moving up the value chain. What we are seeing in the market reinforces every part of this picture. Our big deals with large customers continue to gain momentum, and AI transformation programs are now the predominant pattern across our pipeline. Three large pools of demand are converging on AI native delivery. Technical debt and core modernization estimated at $1.5 to $2 trillion across the world's 2,000 largest public companies. interface and experience depth across customer-facing surfaces, and agentic process transformation, the redesign of business processes and operating models around agents. Globant is positioned across all three. We are winning the modernization pool as an AI native partner, as the IGT relationship with Apollo demonstrates, and private equity is becoming a structural channel for us. The largest prize, however, is agentic process transformation. AI is now adopted across the vast majority of our projects, and the real gains come not from layering AI on top of unchanged processes, but from re-engineering the business around agents and rewiring the organizational chart itself. Across our studios, our 100 squared accounts continue to gain traction and maintain momentum. Our top 50 clients grew over 5% year over year in Q1, with our top 10 and our 2 to 5 cohort growing at similar rates. all meaningfully above the company average. AI pods are now showing up in concrete ways across every studio. A quick tour. In financial services, our work with Banco Galicia is scaling. They have validated the productivity, speed, and quality of our AI pods, and we are now successfully deploying an operating model to manage the high use case backlog. We are now focused on implementing a new AI pod dedicated to the definition and construction of data products. with an initial use case targeting the reduction of the customer contact rate. We are also applying AI pods in our work with a leading student loan company in the US to modernize its loan management systems at scale and speed. In healthcare, life sciences and private equity studio, we are migrating five clients to the AI pods model. At EmployBridge, the first pilot was executed in Q1, and we expect the remaining scope to convert during Q2 into a fully AI pod engagement. Johnson & Johnson continues to be the largest account in this studio with continued growth. In media, entertainment, sports, and hospitality, our 15-year relationship with the Walt Disney Company continues to expand dialogue with several discussions for AI Pods. We are keen to grow with the company by delivering an interconnected experience anchored by Disney Plus and across all core businesses. The LA Clippers, one of our most visible partnerships through our work on the Intuit Dome, is transitioning their full operation to AI Pods. Our partnership with FIFA is now in its fifth year. Diego Tartara will share how we are progressing our support across FIFA's business digital initiatives. At the same time, we have expanded our role as their technology partner for the 2026 and 2027 World Cups, enhancing their digital platforms, delivering a new fan engagement mobile application, and bringing our AI native capabilities to one of the world's most watched sporting events. The Mexican Football Federation has chosen sports and performance to build the most advanced football intelligence ecosystem, including new physical AI applications to further improve sports performance. The agentic solution implemented in La Liga exemplifies the characteristics of a modern sports organization and will serve as a lighthouse for the industry. We now work with all of the big three cruise lines and look forward to growing our work in this space based on our expertise in customer experience. In gaming, we continue to develop our AI project with Riot. Since booking the largest deal in this sector with them last year, we are now integrating our AI pods model into quality assurance. In retail, we introduced AI pods into our dialogue with one of the largest retailers in the United States, with whom we have worked for four years. The retailer was previously considering a global compatibility center, but exposure to AI pods shifted the conversation toward an agentic first solution by unlocking more value and efficiency to build a new mobile app and loyalty program. In the technology space, we are happy to announce that we are strengthening our strategic partnership and 360-degree relationship with Google, where we are projecting strong growth into new areas. In the energy space, we continue our three-year relationship with the U.S. Green Building Council, migrating our work on their primary certification, LEED Version 5, to AI pods. Although the change has been recent, we have already seen significant improvements in process efficiency, and we look forward to seeing this growth in the future. The aviation space has been going through some turbulence by volatility following the sudden rise in fuel prices. This has further reinforced the efficiency gains delivered through our AI pods model. Two of our largest airline clients will be transitioning from a traditional delivery model to AI pods as part of a multi-year commercial and digital transformation. This shift will allow them to increase throughput, reduce cycle times, and operate with a more flexible cost structure, helping offset fuel-driven pressure while continuing to modernize core systems, improve direct channels, and enable more dynamic retailing capabilities. In our new markets region, although our clients face many challenges due to the currently volatile situation in the Middle East, Globant continues steadfast in being a strong and stable partner, focusing on long-term growth. Our partnership with Kidia City has centered on major projects, including Six Flags Kidia City and Aquaravia, the largest water park in the Middle East, with Globant building the end-to-end digital backbone for the guest journey. We are also partnering with Saudi Arabia's local organizing committee to reinvent the football experience centered on the fan ID ecosystem, focusing on a unified AI-powered platform connecting identity, venue access, safety, and fan engagement at scale. The Enterprise AI Studio anchors the platform layer that powers AI pods. with multi-cloud integration across Azure, AWS, Oracle, and Google Cloud. Our partnerships with the major hyperscalers AWS, Google, Microsoft, and Oracle Cloud infrastructure all expanded this quarter, and we were named Google Cloud Country Partner of the Year in Argentina for the fourth time. With AWS, this quarter we surpassed the original KPIs from our strategic cooperation agreement signed last September. aimed at several ambitious indicators, including annual recurring revenue and new solution development. We also continued to deepen our relationship with NVIDIA, which is central to how we deliver AI-native services at the compute and infrastructure layer. Together, these alliances make Globant the AI-native orchestration partner that connects model providers, hyperscalers, and the enterprise. And finally, our AI-powered network which elevates advertising, marketing strategy, and media. Got kicked off the year with incredible momentum, adding 18 new client logos and delivering groundbreaking work. A surreal, celebrity-driven music video which became a full-blown cultural event for Cheetos. the Stella Artois FIFA World Cup 2026 campaign featuring David Beckham in the U.S., a special project for Bancolombia, and Pura Magia, a new campaign in partnership with Disney, which reimagines the meaning of transformation at Walt Disney World. Q1 2026, delivered above the high end of our revenue guidance, advanced AI pods into a clearly strategic position in our portfolio and gave us additional evidence that the macro shift toward AI native services is being underwritten by the most credible investors in the technology space. In summary, we are reaffirming the midpoint of our full-year revenue outlook, which implies quarter-over-quarter improvement throughout the rest of the year, and also a strong focus on capital allocation and returns. and accelerating the highest margin product in our portfolio. We are confident in 2026. I want to thank our clients for their trust, our partners for their collaboration, and our Globers around the world for the work they do every day. With that, I will hand it over to Diego, our CTO, who will walk you through the technology and delivery layer. Thank you.

Hello. Globant is no longer preparing for the AI era. We are operating within it. We are systematically reinventing our delivery models so that every solution we deliver is secure, scalable, and AI native from day one. This is what's driving the $352 million pipeline in AI pods. And the technology layer underneath is what makes this work. And that is where I want to focus today. We have evolved our signature delivery framework built on hundreds of autonomous units to embed AI into every dimension of execution. The three pillars of our delivery model have been overhauled to meet this moment. Our Globers are not just using AI. They are augmenting their technical domains to become multidisciplinary orchestrators. We are also expanding to new roles such as our forward deploy engineering team. We have redefined project management with AI-powered observability and agentic workflows that drive measurable efficiency gains. AI readiness and accountability are now mandatory across all offerings, evolving our agile DNA into a truly AI-native model. We are also building what we call our agentic economy, an inner-source ecosystem of more than 20 validated cross-industry agentic solutions that we package as deployable assets directly into AI pods engagements. Whether it is an IT root cause analysis tool for airlines or a supply chain agent for oil and gas, These assets are now being replicated across media, pharma, and tech in weeks rather than months. We put special focus on the major demand pools that Martin mentioned, AI delivery, modernization, and technical debt. Our forward deploy engineers are prototyping these solutions in 14 to 21 days. This is the practical mechanism that lets Globant participate in what Sequoia and others have called the services as the new software era. We are building compounding IP that generates recurring value and positions us as a long-term strategic partner. AI pods are how that IP gets monetized. As we approach the 2026 World Cup, our work with FIFA is accelerating. AI agent networks with human supervision will power key FIFA platforms, enabling more consistent fan engagement across competitions, smarter activation of partnerships, and faster deployment of new digital experiences. In Latin American football, Deportivo Toluca, the current Liga MX champion, has launched a new engagement platform developed by Globant and our sports products division, Sportian. The platform offers supporters live in-match services, ticketing, e-commerce, statistics, and exclusive content, helping the club personalize the fan experience. In consumer goods, We are working with Grupo Mariposa, one of the region's leading CPG companies, to transform their marketing model around the consumer. The initiative integrates data, AI, MarTech, and agile methodologies to enable smarter, faster, more precise decisions. Marketing evolves into a continuously learning system in which creativity and technology adapt together to consumer behavior. Globant is supporting CMPC, a global leader in sustainable pulp and paper, to deploy an AI-powered solution that enhances supply chain traceability and compliance, end-to-end visibility, regulatory adherence, and a clear sustainability narrative. Our ecosystem continued to deepen in Q1. We announced a strategic partnership with Adyen for next-generation merchant payment experiences. We obtained the Gen AI competency from AWS and achieved expert status for SAP Business Data Cloud specialization. Our collaboration with Adobe expanded as we became the first customer experience orchestration partner in LATAM. Our partnership with Autodesk now includes integration with Tandem Digital Twin Technology, unlocking new efficiencies in design and operations. Combined with the partnership recognitions Martin shared earlier, this reinforces our position as the AI-native delivery layer. In Q1, we published two new reports through our research arm, one guiding financial institutions on adopting real-time AI-driven operations and another helping airlines transition to modern retail models. Both are available at reports.globant.com. Our role in this market is straightforward. We turn AI from a tool into a delivery model, and we package the IP we generate into assets that our clients can deploy. The technology layer behind AI pods is now compounding, and that is what gives us conviction in the trajectory Martin described today. With that in mind, I will now turn it over to Juan. Thank you very much.