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, Martin Nikosia. our Chief Technology Officer, Diego Tartara, and our Chief Financial Officer, Juan Urtiague, 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. Globent 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 co-pilots 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 OpenAI 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 routes 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 base 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 dollars across the world's 2 000 largest public companies interface and experience debt across customer facing surfaces and agentic process transformation the redesign of business processes and operating models around agents globent 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 2-5 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 U.S. 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 Aquarabia, 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 continue 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 Bank Colombia, 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 model 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 globe and 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.globans.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.

Hello, and good afternoon, everyone. I am pleased to discuss our results for the first quarter of 2026. We have begun the year with a focus on stability and execution. We are operating in a discerning client environment, and we are seeing buyers concentrating on high-impact agentic AI projects and digital transformation, which is exactly where we are positioned. We are executing on the financial front, protecting the bottom line, improving working capital, increasing capex efficiency, and repurchasing our shares. In the first quarter, our revenue stood at $607.1 million, representing a 0.7% decrease on a reported basis, coming in above the high end of our guidance and reflecting a 400 basis point improvement in year-over-year trajectory compared to last quarter. Q1 revenues included 200 basis points of FX Tailwind. The improvement is most visible in our top accounts. Our top 50 clients grew 5.2% year-over-year. Our top 10 grew 4%, and our 2-5 cohort grew 8.2%, all materially above the company average. Many of our top 20 clients returned to positive year-over-year growth this quarter. This is aligned with our 100-squared strategy. Our revenue per employee also increased again this quarter, driven by our pivot into platform and AI-led delivery, which allows us to maintain our revenues with a slightly lower headcount. Our adjusted gross profit margin for the quarter was 37%. Gross margins continue to be impacted by the relative strength of LATAM currencies, primarily the Mexican peso, the Colombian peso, and the Brazilian real, compared to the prior year, alongside statutory cost increases in our delivery centers. Over time, as AI pods grow as a share of our revenue mix, their structurally higher margin profile can begin to contribute to our blended company margins. This is the longer-term margin opportunity we are building toward. Our adjusted operating margin came in at 14.1% for the quarter, with SG&A at 18.5% of revenues. The effective tax rate for the quarter stood at 23.5% within our guided range. Our adjusted net income for the quarter was $65.2 million, representing an adjusted net income margin of 10.7%. Q1 adjusted diluted EPS came in at $1.50, above the midpoint of our guidance. This number absorbed meaningful FX headwinds, primarily from the Mexican peso, the Colombian peso and the Brazilian real. On an FX neutral basis, adjusted EPS would have been higher. The underlying operating performance was consistent with our internal plan. Our balance sheet remains strong, ending the quarter with $200.5 million in cash and short-term investments, or $161.2 million in net debt. During the first quarter, we invested $50 million to repurchase shares, as per the plan announced in October 2025. Our original share repurchase program was completed during Q2. In Q1-2026, we generated $36.1 million of free cash flow, achieving a free cash flow to adjusted net income ratio exceeding 55%, compared to negative $5.7 million of free cash flow in Q1-2025. This is the first time Globent has generated free cash flow in the first quarter since 2019. We expect to continue generating strong organic free cash flow for the full year 2026. We will continue to allocate capital with discipline across two priorities, returning capital to shareholders through the newly authorized repurchase program and investing in high-return growth initiatives, principally the continued build-out of our AI pods business. Now let me move to our outlook for Q2 and for the remainder of the year. For the second quarter of 2026, based on current visibility, we expect revenue to be between $610 million and $616 million. The Q2 year-over-year guidance implies, at the midpoint, a positive FX tailwind of 100 basis points. We expect a non-IFRS adjusted operating margin between 14% and 15%, and the IFRS effective income tax rate is expected to be in the 22% to 24% range. Non-IFRS adjusted diluted EPS is expected to be between $1.45 and $1.55 per share, assuming an average of 43.6 million diluted shares outstanding during the second quarter. With respect to the full year, at the midpoint, we are maintaining our 2026 revenue guidance unchanged. We expect revenues in the range of $2,462,000,000 to $2,508,000,000, implying 0.3% to 2.2% year-over-year growth, with approximately 100 basis points of FX tailwind. Both Q2 and subsequent quarters imply sequential growth and a healthy exit rate more aligned with industry growth averages. In terms of profitability, we continue to expect our adjusted operating margin for the full year to be between 14% and 15%. Our margins continue to be pressured by the strength of LATAM currencies relative to the dollar. The IFRS effective income tax rate is expected to be in the 21% to 23% range. For the full year, we are also reiterating an adjusted diluted EPS range of $6.10 to $6.50, assuming an average of 44.1 million diluted shares outstanding for the full year. To conclude, Q1 was a quarter of steady execution. We are seeing improvements across our top clients. We are executing on the things that we can control, and our balance sheet remains a source of strength. Our focus on embedding AI into the core of our value proposition is clearly resonating with our most strategic partners. Thank you for your continued support.

Thank you, Juan, and hi, everyone. So as we go through the Q&A section of the call, I will first announce your name. And at that point, please unmute your line and ask your question. I will also ask you to please limit your time to one question and one follow-up. So with that in mind, we will take the first question from the line of Brian Bergen from TD Cohen. Brian, please go ahead.

Hey, guys. Good afternoon, good evening. Maybe my first one, can you just talk about what you've been seeing in the broader conversation? So it's good to hear the traction on the AI pods, but when you just think about the broader conversation, have you seen anything shifting in more recent weeks, you know, April and May? How is that compared to the first quarter as it relates to pipeline conversion?

Yeah, the pipeline remains – hi, how are you? The pipeline remains in a very healthy state. conversion is quite good we're seeing large deals that we have been closing during last year and also closing during this first quarter that will gain traction moving forward so it's configuring like a space in which we'll have like several you know big deals starting to yield some results moving forward and we're very happy for that. Of course, there's some concerns around what's happening in the Middle East. However, we see the business healthy there. We have, you know, some concerns around airlines and the amount of the price of the fuel that is kind of changing the landscape for some trips. But in general, we see a quite positive environment in terms of bookings, long-term deals, which are extremely important, that are coming back and gaining traction. And, you know, one remarkable thing that I would like to mention is that the growth on the main accounts is way above what we are seeing in the full company, right? So, this is kind of the result of the focus we're having on the 100-square accounts and the focus that we're getting on those large customers that are needing more than ever. When we talk about AI bots, we're talking about a way to deliver the traditional services. We're not talking about a specific offer, but we're talking about the broader conversation too and a new way of delivering that broader conversation in a way which is AI native. So I cannot split the conversation from the AI thoughts from the broader conversation. But yes, I can say that in general terms, conversations are going in the right direction.

Okay. Okay, that's clear. And then maybe on the margin, Juan, can you quantify just how much FX pressure there is within the gross margin in the first quarter and in your outlook for this year? And in gross margin assumption for the year, are you including any tailwind from the structures?

Sure. So, in the first quarter, you know, compared to the last quarter, we see about one percentage point of FX headwind coming from mainly, you know, Colombia, Brazil, a little bit in Mexico. um in terms of uh for the rest of the year you know so far the assumption is is the same i mean we we cannot predict what's going to happen in terms of effects but we will definitely work you know to to be as efficient as possible you know to increase utilization levels as different ways to to offset part of that and we do have very little uh positive impact uh being assumed toward the last part of the year as you know you know last quarter we mentioned you know a run rate an expected run rate of sixty two hundred million dollars of failed ports and that's going to be towards the end of the year so so even though it's growing very fast it is still a small part of our business but what is more interesting is that if this continues to scale the way it is scaling you know it's a it's a good place to be looking into the future because this model is proving to be with better margins overall relative to the rest of our business or to the rest of the delivery models.

Thank you. Thank you very much.

Thank you, Brian. The next question comes from the line of Maggie Nolan from Will & Blair. Maggie, please go ahead.

Hi, thank you. Maybe to follow up on what Brian was just talking about, But the AI pod margin is obviously quite strong. Do you expect that to be sustainable into the future, or what are your expectations for competitive pricing pressure there?

I mean, there is competition, but at the same time, you know, we see that as we scale projects with AI pods, you know, we improve significantly our agents. We improve how we use the different models and the tokens. and also, you know, they get more efficient because the agents that we build, you know, as they learn, as they evolve in the project, you know, they get more efficient as well. So, I think that that's going to take us or that's going to help us offset whatever pressure might come from other places. So, the expectation for us is that the AIPOD delivery model will overall deliver higher margins than the other, you know, more traditional ways of delivering.

We are in a trend of growing revenue per head for many, many years already, right? So this is constantly reflecting the way we understand how to scale our business, you know, always looking for margin or looking for new practices and innovation, and customers are reacting quite well to that, as the numbers demonstrate.

Martin, maybe to build on that revenue per head comment, I would imagine that the forward deployed engineers are contributing to that growth as well. And maybe you could just comment on how those capabilities differ from your historical workforce and what additional changes do you need to make to the workforce to continue to capture market share.

Yeah, I will answer the first part. The second one will be on Diego. So the forward deploy engineers is something that we have been doing for many, many years. We didn't call it that way, but our engineers working at our customers' premises and understanding the processes and trying to propose, like, new ways of doing things. And now they became, like, agents of transformation, but instead of using just one platform, they can use pretty much any platform. and so they are being very welcome within our customers and this is something we have been doing forever and now I think the next generation of you know understanding or knowledge has to do with changing full processes I mean processes that before were impossible to change now it's possible to automate or at least think it in a totally different manner and and that kind of mindset is the mindset that if we are embedding and putting into you know our teams in front of our customers or forward deploy engineers in front of our customers I

know if you want to complete I think I think Martina capture pretty well the whole idea so Maggie just to give you an idea of the similarity this is the actual version of what an enterprise architect used to be. So the thing is they're called deploy because now there's a platform involved that you need to deploy and then implement. And implementation is exactly what Martin said which is having knowledge on you know how to map the company's data structure, architecture, the different components, connect that and build and create the platform for building the solutions on top of that. So it's that That typically accounts for, you know, the top-notch engineers, the most senior tier of engineers. And like you said, they tend to contribute to that revenue overhead uplift.

Sure.

Welcome, Maggie. Thank you, Maggie. Next up is Tian-Sing Huang from JP Morgan. Tian-Sing, your line is open.

Martina, I like your comments on the prepared remarks about the rewiring of the industry and things like that. So I'm just curious just to focus on that with these LLMs investing in services. How do you see the competitive landscape changing? I know we've seen this a little bit before in software and enterprise software. Do you see it differently here? You know, it is a validation of services, of course, but not sure exactly what their long-term intent without domain knowledge can be, like what Groupon has. So how do you see the, you know, the competitive dynamics evolving here?

That's a great question, Bishin. Great to see you, Mark. Yeah, great to see you, guys. So, first, I believe that the massive change that is happening and the things that must be done moving forward are so large, but so large that there's no way that all those things can be captured by child water companies, which by the way, wouldn't be independent. So I think the value of being an independent company, the value of being able to create and facilitate so the value of and saving the tokens that the customers are producing the value of advising your customer are re-engineering the processes without any bias and being able to use the best possible technology is still there so I know I would like to say that I've been in this business for for many many years and we have seen many times in which companies are moving back to services from products to services and I believe this is a huge stamp of approval that we have been talking about that for the last two years I mean the big price is deployed it's not just a model and we are playing the game of deploying it and our relationships with our customers and trust and confidence and level of innovation is absolutely there so I see

this as a very exciting news so I don't know I want to make a little comment we are actually in conversations with with our partners the same companies that are pulling together their services are in conversations with that and this is actually a model that the industry has been having for 20 years it's what Amazon does it's what Google does they all have services capabilities Microsoft as well and that's the excuse to capture business and routed to the partners of the network so a ton of the work that we do for AWS as an example comes from AWS themselves so this is actually a very similar and that's why their team is actually so small in scale so the idea is that the the major list of this type of work should be done through their partner network, but they need to be able to capture. If they don't provide services, they are not a go-to person for capturing that. That's a full demonstration of what we do. 100%.

Yeah, I'm glad you guys answered that way. It feels like a validation and I think the market hopefully will appreciate that. Maybe just my quick follow-up just to ask a model question for you, Juan. I think you talked about it earlier in Marz's question, but just thinking about Q1 being the trough, CQ seeing a little bit of sequential growth, should we continue to assume it builds from there based on the backlog of work and what you expect in terms of closed sales? I mean, should we walk into faster, accelerating growth, and then we exit the fourth quarter a little bit faster, assuming there are no other surprises from the macro?

Yeah, definitely. When we look at the fourth quarter last year, you know, we closed at minus 4.7%. we look at this quarter it was minus point seven percent the foot the next quarter and between q1 and q4 there was you know some sequential decrease now when we look at q1 to q2 we're going to see that there is sequential growth we might also you know depending on where we land within the range there's a chance that we end up with some year-over-year growth and when we look at the second part of the year the combination of more working days that are still relevant plus you know the what martin explained at the very beginning you know some large contracts that have already been signed they will start to generate incremental revenues uh i think that's what should help us you know to have sequential growth both in q3 and then in q4 and probably in the year you know in a much better way when we look at the year-over-year growth. And then on top of that, we will see hopefully the acceleration of our AI pods that should be very, I mean, it's as important because it's going to start helping us not just on the growth but also on the margin going forward.

Terrific. That's great. Thank you. Happy to see you all.

Yeah, same.

See you next week. Thank you, Dishin. Thank you, Dishin. The next question comes from the line of Brian Keene from Citi. Brian, please go ahead.

Yeah, hi, guys. Could you just talk a little bit about those larger clients? Your top clients are growing faster with you guys. Maybe, you know, is that just a sales focus and a little bit about maybe what those clients are doing in particular that could be the start of something bigger as we go forward this year and then the next?

Yeah, thank you, Brian. I'll take that one. So we, you know, we are seeing, you know, some very strong growth on our top 10 clients, around 4% and quarter over quarter. And that is a result of the 100 square strategy where we've been investing so much focus and effort. you know when you take a look every every sample that you take from our so 20 clients you'll see that the growth is really is really much higher than the rest of the of the lineup of clients and the kind of work that we are doing you know largely you know focuses on you know on on AI infused projects we are advancing conversations around migrating existing operations or starting new development with AI Pulse in the vast majority on our top customers. So a lot of focus on using AI to gain efficiency, to develop faster, better, to get to market in better shape, to deliver more features, and to test these products with consumers in real-life production in shorter iterations. One very good example of that is Disney, where where, you know, we're also seeing some very nice recovery this year compared to 2025 and where, you know, the focus of the new CEO, Josh Amara, is really, you know, interconnecting the Disney guests, the Disney, you know, customer experience using Disney Plus at the center. and by having Josh coming from parts and experiences he knows very well our work with Disney for so many years and we are very well positioned to capitalize on his strategy moving forward and at the same time obviously we are also having with both Disney Pods and Disney Media a ton of conversations around migrating their operation to AI Pods as well.

Okay, that's great. I want to add something to that, because I think it's important. You talked about large customers, and with every single large customer, operational efficiencies and getting the most out of money is still a conversation. It's there. And those large accounts, those top accounts, typically they either belong to a heavily regulated market like airlines, banks. they have very high standards of security and when you see that we have we have deployed AI pods on 40% of the content correct the 40% and and more are on the way which pretty much not only validates AI pods the concept with top clients but But also speak, most of those companies are pretty advanced when it comes to AI. It's not like they haven't tested, they haven't done it, and still they found a lot of value there. So I just wanted to add that because I think it connects with what they needed and what Fernando mentioned before.

No, that's really helpful. Thanks for those comments. And then just a quick follow-up. Middle East exposure in general, how much do you guys have? and what's the outlook for Middle East kind of going forward? Will it, I mean, have you built in some cushion for potential disruption there?

I'll take that one. So, you know, when we look at new markets, that accounts for about 6% of revenues. Middle East is about two-thirds of that. In the numbers that we provided, you know, the midpoint basically is assuming the things will continue more or less the way they are. You know, we are seeing deals getting closed. You know, we are seeing some deals actually starting, hopefully very, very soon. It's from Python as well. The Python is very solid. So the way we build the guidance for the year, basically the lower end would imply a significant deterioration of that business. That's the main assumption on the lower end is a deterioration from today that, you know, so far we are not seeing it, you know, in our numbers.

Okay.

Thank you.

Thank you, Brian. The next question comes from the line of Arvind Ramani from Trust Securities. Arvind, I'll have you back. Please go ahead.

Hi. Hey, thanks. Thanks for doing the call and good for the results. I wanted to follow up on the questions Indian asked earlier. You know, certainly kind of validates, you know, some of these anthropic and open AI making the investments validates the services model in terms of like last mile delivery I think I think that's quite here do you have your kind of view them as a little bit of competition because you know they're going to be out there coming grabbing some resources competing with your clients and how do you do the competitive environment and just just on that as well if you're not comment on on you know for the relationship you're having the talent

here Arvin hi how are you thanks for your question this is an extremely large market I mean as I was saying before every day there's a new you know company that is trying to compete there and these guys that's very good distribution but they have some I would say some some things that are structural for example any of those two companies that are being formed right now cannot offer no like model independence or cannot offer now like the way of I would first I would provide you with the piece of advice which is absolutely absolutely the best for you right and that's something that that that is difficult to to cope with but of course we see them as a competitor we see them as also a partner because we do things and they will do things through us we have built in these years in these 23 years exactly what what they want to right now this is a massive support to our long-term business and the other thing is this is not a business in which one winner takes all there are other business in which one one winner takes all in this business there's a it is a business in which the relationships with the customers count the whole you know relations corporate relationships and MSA's you have and you know people that knows people, and things like that counts a lot. And I would say that this is a scenario in which we have a lot of, you know, assets and a lot of things that we develop with the ears to cope with that. So, again, this is a massive market. I said $2 trillion only for technology. If you expand that into BPO, into code process, all the processes that you have outside there, is much larger than that so you know I don't know this is something that is too large the changes is that much we are innovating we're bringing the latest way of thinking to our customers the customers are loving it I feel extremely confident I feel extremely confident that but for us is only a great signal of what we're building as I said on my opening remark yeah yeah I might I would

agree with that you know sort of my own research also suggests that you know enterprises are looking for multi-modal approaches because you know if you just kind of go with a single model whether and topic or or or open eyes model you kind of are locked into that model right but and then you kind of stuck with their pricing and you know kind of development but if you have this multi-model orchestration layer on top, then you can, I mean, not just a tree store, right? You can even use some Chinese models. So what do you think makes a ton of sense?

Not only that, Arvin, but also hybrid models where you can switch. You can actually use your own locally run chip models for simple things. So, yes, that is totally correct.

Right, right. And if I can just also maybe re-ask the question on Palantir, right? Because, I mean, are you seeing Palantir on certain deals? Do you look at them as a partner, or do you compete with them? What's your approach on Palantir?

No, we see them as a partner. I mean, we like them. They're a great company. I think that in certain places, in certain, you know, specific situations, we cooperate. so you know again we are a company that needs to solve the problems of our customers in the best possible way and and that commitment that we have and that we will continue having is independent on any of the products that we use in the back and sometimes we have things that can do a good portion of what our customers need we use them sometimes some other times we need to go with a partner and we go with a partner but what is not compromised in many of our decisions is that what we are proposing to the customer is the best for them so I see Palantir as a company that we can cooperate that we can expand our relationship and I we respect them a lot they have a great product and we believe that in certain places we will cooperate with them

perfect and then just kind of quick uh kind of quick follow-up right like i mean uh you know something good set of results you know when i think of like you know guidance which is reaffirmed um was it reaffirmed mostly because you're being a little bit conservative like why not raise guidance you know in line with the beat and the momentum and and all of that as you know

you know we have part of our business in the middle east the situation there as you know changes all the time and and you know we want it to be in a safe place you know and not take a necessary risk at this point in time you know there is nothing to gain from you know taking too much risk on the guidance thank you welcome thank you very much Arvind the next question

comes from the name of James Friedman from Susquehanna. Jamie, please go ahead.

Thanks, Arturo. I'll just ask my two up front. So, Martine, I'd be interested in

your perspective about Globant

Gut. It seems like it's kind of like the higher end of strategy consulting. And I'm wondering how you can use Globant Gut to generate incremental revenue downstream. And then, Juan, if I could just ask, last year macro was under pressure in LATAM. If you could just give us the macro for, the quick notes on macro, macro for dummies in Latin

America, that would be great. Thank you. I would say the first I would ask you to compliment, but that for us is a very good way of entering customers, you know, marketing and technology and to the ai gets connected deeper every day and the kind of caliber of ideas that these guys are having is really impressive you know when i see the the reviews that we do you know every month with the teams and and i see you know when the guys from god come it's a it's very rewarding to see the caliber of campaigns the color of ideas the caliber of customers that they are getting and this is for us like a door open for them come with all the rest of innovations we have on the technology side and keep on selling our CDs as the magnificent vehicle to expand that relationship that every day marketing technology operations will be more integrated into the same thing and we can as a company tackle those three

things with our offering when we look at Latin America you know we're seeing a more stable scenario Argentina is the country that is driving most of the growth in the region right now followed by Brazil but in general I think it's a more stable scenario relative to other years perfect thank you both thank you

Thank you very much, Jamie. The next question comes from the line of Guggenheim from Jonathan Lee. Jonathan, please go ahead.

Thanks for taking my questions. I appreciate the comments earlier about the positive bookings environment. Is there any way to quantify what bookings were in the quarter, how that momentum may have trended from January through March, and what you saw in April into May?

I think in the quarter, no, no?

No, I mean, April in the quarter. So, basically, you know, when you look at the first quarter in April and, you know, the couple of weeks from May, the situation is similar. We are not seeing big changes there. You know, overall, we had a very strong Q4. As you remember, it was a record quarter. That is helping us a little bit on what's happening in Q1, you know, when we were able to exceed a little bit our initial guidance. And it's also helping us to reaffirm the full year. You know, the level of bookings that we've seen in Q1 and, you know, whatever has passed of Q2 is also allowing us to maintain, you know, the guidance, even in the situation that, you know, that we know that the new market vision is under a little bit of stress. But, you know, so far, no big changes, and that's enough for the guidance that we have today.

I appreciate that, Collar. And, you know, what in your customer conversations gives you confidence around that back half ramp, particularly around sequential growth in the fourth quarter and how much go-get is potentially needed there?

So, I mean, as we were discussing before, part of the – or the second part of the year has two main components. One, which is a higher number of days in the second half of the year. And the second one is there's basically four large customers with whom we have already signed contracts. And those contracts should be able to help us, you know, because they are scaling as we speak, right? One of them is a professional services company that, you know, has been one of the drivers of the lack of growth in that sector that is coming back. There's a big tech company that we recently became a preferred vendor. That's going to help us also on the second part of the year. And then we have already spoken about a gaming company in the last quarter and a PE-backed company as well. So those four contracts that are scaling as we speak, combined with the count days of the second half, are the drivers of the second half of the year.

Thanks for that detail.

You're welcome.

Thank you very much, Jonathan. The next question comes from the line of Sean Kennedy from Mitsuko. Sean, please.

Hey, guys. Congrats on the resilient results. Really great to see. So I was wondering if you could discuss a bit more about the early customer feedback from AI pods. And specifically, what are they saying are the greatest benefits from the program? And if there are specific industries that are seeing more traction than others currently.

So, like I mentioned before, one of the good things is that the data comes from our top accounts, which are the main drivers of the growth of AI pods. So two different things. The first one is the benefits of the models, both in terms of efficiency, but also in terms of the quality of the outcome. So we've not just proven that we can produce faster, but actually that the quality and the full product and release is top-notch, right, according to the standards. So feedback has been very positive. In fact, a lot of the growth, we typically, the way we do AI pods is we have an experimentation phase. We have a, and then we have a scaling phase. And so typically you don't scale if you haven't passed a testing, right? A VOC, only one pod operating under this model, and then they do the switch. So it is important to understand that when we are reporting revenue, it has been tested. A couple of things that I think are super important that make a big difference. First of all, the process is baked into the tool, and this is actually great. This is the first time we can do that. Before that, the process was actually a manual, if you wish, and you train people to follow that process. Now it's being baked into the tool. So it's a lot more resilient to, you know, people, and it holds your knowledge. The second one, token consumption. This is something that we haven't mentioned, but it's becoming extremely important. A lot of the companies that have implemented tools such as Cloud Code, Copilot, et cetera, they're working with them, and they're not getting the most out of that. But on the other hand, they have increasing spend on the token consumptions that start to be actually part of their P&L, an important part of the P&L. And part of that consumption comes from misuse of the tool, which means incorrect prompting and data preparation, incorrect description of the process you must follow, quality gates, et cetera, et cetera. So, a task well-executed typically takes a third, a quarter, or even less tokens than the same task with recompting, corrections, etc., etc. So, that's another interesting and important data point because you can actually see the tool in action, and you pay for what it actually produces output. so feedback so far has been great on every single implementation the the efficiencies have been have been shown and and that's why it is a keeper we have had not a single client actually going back from a post which I think it's a it's a solid statement of the benefit it has yeah and also two more

things the the fact that you can have a like a enterprise ready process baked in into that you know into that thing I mean if there are plenty of people now by coding solutions inside corporations but then they're local in their machines they're not scalable not secure not ready for the enterprise and with our AI boss who are being able to grab those things and that's ideas and take it to the next level in terms of enterprise readiness so that's extremely important how the process is documented all along the way and we have an enterprise ready kind of solution right and then the rest of the things is is just benefits right you consume less tokens you have a corporate process inside there you can repeat the process and improve the process every time with your customer you can customize the process with the data of your customer so it's much better than the traditional services this is what Diego is describing is that it's a real AI native service as opposed to the traditional service and this kind of Scale on supervision is more similar to an assembly line rather than just a massive matrix of projects that you need to fulfill. So the current business is not going anywhere. And as you see and demonstrate it, it will keep on being and keep on existing. But this AI bot is on a different level of execution. Totally AI-native, totally AI-driven plus human supervision. and easily in charge per consumption you don't need to interview people you don't need to do anything you just subversion air and everything gets executed with enterprise class and human supervision to ensure that you are doing the right thing so it's really a different value proposition and our customers are really welcoming because it's a totally different way of being transparent to right a full transparency in each asset that we create each artifact gets connected to a number of tokens gets connected to a number of you know consumption that you have there so it's really paying by the output rather than paying hours so it's a really new model

got it it's all great to hear congrats again thanks guys

thank you thank you thank you Thank you so much Sean. The next question comes to the line of Gustavo Farias from UBS, Gustavo please go ahead.

Hi everyone, my question is on check to location, so buybacks of course suggest the confidence we have in this talk, but on the other hand it could limit potentially strategic M&A. So if you could please share how do you see the need for M&A in the short or medium term to remain competitive?

we are always looking for things and for opportunities that won't go away and the other thing on the buyback right was it's at management disposal and as we see we see an opportunity to to buy the company that we know that it's relevant and that we trust and we think it's undervalued so but if we find a better opportunity or very use to invest of course on our ai boss or company that we like and we want to acquire so on so forth i mean we're not limited uh in doing so so a constant assessment on which are the priorities for our capital is being carried out but we want to be extremely disciplined in how we increase our return on equity or return invested capital uh moving forward i know point if you want to yeah definitely you

know we we have the we have the firepower to do money in case we want but of course you know i I mean, there's one stock that today is trading at a very low multiple, and it's a company that we know very, very well, and that's our company. So between that and buying something else, sometimes, you know, it really needs to be very, very strategic. It really has to meet a very clear need for us at this point to go and do that. Because at the current valuation, you know, there is a mismatch between Globant and some companies in the private sector.

Very clear, guys. If you may follow up, I think last quarter you guys seemed a little bit conservative on tackling fixed price contracts, a million margin concerns. And we see fixed price as percentage of revenues roughly stable versus last quarter. What are your current view on that?

Yeah, the market today, you know, pushes for fixed price. it's something that is a reality across the industry interestingly you know now we have tools that allow us to deliver in a more efficient way so so you know we can use our reports to deliver on many of those contracts so we are more confident on the fixed price and what maybe we would have been a year ago or two years ago so it's something that you know we need to we need to look at because the market is pushing for fixed price and you know the tools that we have today in front of us allow us to, you know, to do better than or to do well in fixed-price

contracts as well. Very, very clear. Thanks. Thank you. Thank you very much, Gustavo. The last question that we have time for today, unfortunately, comes from the line of Surrender. In from Jeffries. Surrender, please go ahead. Awesome. Thanks, guys. I guess, Martin, you've been very

clear about the ambitions for the AI pods model. Is 2026 effectively the year that you're gathering, I guess, data points to kind of really push forward with the strategy at this point? How do we think about where the longer-term ambition is? Is how much of your revenue can you get there? And then what is the current friction in terms of why clients aren't adopting it faster given all of the data points that you know diego kind of highlighted uh i didn't get

the last part of your questions or either oh the last part is just that diego highlighted a lot of

really positive data points about the ai pods model and so how do we think about that in terms of why clients wouldn't be adopting it faster is there is there a natural balance within your business ultimately in the long run between the AI pods model maybe fixed price contracts or how do you think about where all of this is heading and

where you would like it to ideally be sure a post is kind of a way of delivering which is absolutely different from before and it's an AI native no service in which we deliver in a totally different manner from before now our forward-deployed engineers are there just trying to do the agenting transformation the AI agenting transformation of our customers helping them with processes with reinventing and rethinking marketing processes you know human resources processes you know account referrals the compels finance or financing a finance approach processes so there's a constant connection between how you create a future project with our forward-deployed engineers and how ambitious is that project and how you deliver that both things must be extremely innovative and this is what we're bringing to the market first idea how to make an agency transformation of your business and then when that is ready we don't deliver in the in the in the in the traditional manner but we deliver with AI native services so long term my ambition is that although our current business as we deliver today will keep on existing because, you know, many of our customers is the preferred way of engagement, this new way will start to slowly, number one, gaining market share, right, from other competitors, and number two, transforming the way we deliver our current services for our customers. So the ambitions are large. I prefer to refrain from giving you any number but i have in mind like um as a as a way of transforming our current business into something totally different and um and this gives you place to think about many other things like you know how to create those tokens that we will be using uh in in the AI models how to distribute them how to route them how to I mean it's a it's a pretty different game when you start thinking about charging per output or consumption in the case of software development lifecycle but then when you are talking about an AI thought of operations you may charge per you know streaming monitoring hour or per ticket source. I mean, there are hundreds of different delivery units that we may use on our AI pods that our customers will be extremely tangible and not in the same way it used to be. So this technology is giving us an opportunity to change the whole business and this is the aspiration we have. Now, how fast we can do it will depend on our customers on how good our AI pods work, so on and so forth, at least what David was describing. I don't know if one or if...

Yeah, no, but listen, we are seeing many, many very interesting conversations progressing with all of our top customers, right? Most of our top customers. And our top customers are really marquee customers and they are leaders in the space and where they are. And without exception, they are either in the piloting phase or scaling phase, and those who are about to start are assessing the technology. But the interest that we are seeing in the top customers is very strong. There's no structural friction with the clients whatsoever in the model. I think it's just a matter of our clients understanding the technology and progressing the processes and so on and so forth.

That's helpful. Well, and then just as a quick follow-up on the commentary about the forward deployed engineer, how much of that, based on your earlier comments, is what I would call just a rebranding of the way that work used to be done in certain instances? Or how much of that is potentially structurally different that you guys might have to do? Meaning does a forward deployed engineer have to be on site to a larger extent? does it change some of the economics how does that impact you guys given that you guys have optimized for mostly delivery offshore I think it's actually

it's an interesting question so so I'll tackle that in two different stages first the formation I mean what does it means and what is delta between a very good engineer and a forward deploy engineer first of all is a platform and knowledge of the platform any forward deploy any of the ploys a platform it has to have profound knowledge of that platform the second one has to do with the work that most of the enterprise architects used to do and that's the keeper which is understanding the art B architecture components data security center of the target client and what's the best integration strategy. The third one is a little bit of building on top of that with regards to building the solution. So that's the enablement of the forward deploy engineer then it comes to solutioning and the deployment is actually functional to that solution so it's also important that that person understand the problem is trying trying to address so there's a conversion and reskilling that while conserving a lot of the learnings of that type of engineer you need to build something on top of that so we needed a retraining of most of our top engineers to make them

forward-able engineers and do they have to do more work on site or does on site The goals are very different than, you know, on-products.

Yes, second part of the question. Yeah, we can actually execute a lot, typically, what's called a discovery. It's a lot better when it happens on-site because a lot of the things have to do with interviewing people that are related not only with the platforms, but also, you know, with the areas and the processes you need to convert. so typically if you do it outside it's a lot better still can be done offshore and

we have done it thank you thank you surrender thank you thank you surrender

so with that in mind that's the last question we have time for unfortunately I will now turn it back to my team for some closing marks my team please go

ahead thank you Arturo and thank you everyone for being here today and for your continuous support thank you so much see you in the next quarter thank you