Globant S.A. (NYSE:GLOB) Q3 2022 Earnings Call Transcript

Arturo Langa: Our next question comes from Diego Aragão from Goldman Sachs.

Diego Aragão: Yes. Can you please just provide some color on how the Globant X business unit formed this quarter in terms of growth and how much it represented in terms of revenue as well as whether this is already contributing positively to your margins or still diluting the margins?

Juan Urthiague: So in terms of Globant X, we continue to invest in a number of platforms some of which are already generating revenues. Others are in kind of friends and family stage where we’re testing with some customers that are good friends of ours. And finally, we have others that are just proof of concepts at this point. When we look at the level of — when we look at the level of revenues that these platforms are generating, right now, we are — it’s around 2%, 2.5% of our revenues. They are growing at a nice pace. It’s still a small number in the total revenues of Global, but it’s growing at a nice pace. Now in terms of margins, by definition, all these platforms have to improve our overall margins, right, especially when you look at the gross margin level. Of course, as we are investing, they bring the depreciation and amortization. But at the gross margin level, they are — they improve our margins overall.

Diego Aragão: Understood, Juan. And maybe if I would think about like the portfolio of products in there, is there anything in particular that is driving most of the growth or is coming pretty much from different solutions and applications?

Martín Migoya: Yes. Look, StartMeUp is doing great. I would say that Magnify is like in a pretty mature situation where our customers that are using it are consuming more every day, and that’s great. I would say that all the things connected to La Liga and delegate has like the technology we got from that agreement — it’s a lot of — there are a lot of platforms for streaming for prevent piracy to many platforms that are generating revenue in a pretty clear way, and it’s an important addition to the platforms. And of course, Augoor, which is generating revenues more allowing us to differentiate the offer that we do for our customers. I think that those are the areas where we are seeing like more expansion and more growth.

Arturo Langa: So thank you, everybody. That will be the Q&A session for today. With that, I will now ask Martin to provide some closing comments. Martin, please go ahead.

Martín Migoya: Well, thank you very much, Arturo. We are very happy to be here today. Thank you very much for your continued support and understanding and looking forward to see you in the next quarter. Thank you.