Globant S.A. (NYSE:GLOB) Q3 2023 Earnings Call Transcript

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We deployed GeneXus Enterprise AI, which not only provided a secure connection to cutting-edge large language models, but also ensured compatibility with the client’s SharePoint database. The company now has a smart and secure chat-based system that the legal team can rely on and has made them more efficient. Over many years, Globant has been involved in the smart payment space and has introduced proprietary intuitive services and products that bring people into the digital payment space and expand the ecosystem. We have new developments from our work with a leading payment acquirer that provides IT services to financial entities that include ATM networks, online banking, corporate banking, mobile and security solutions as well as information processing and service and tax collections.

We created a customizable digital wallet for them, capable of the full suite of services required by today’s market, from QR payments to online and mobile banking, and more. The wallet is fully adaptable to each one of their clients that can now engage better with their customers, including advertising campaigns or promotions that will be displayed within the mobile application, as well as managing communication strategies through notifications to customers. They can also track transactions, manage complaints, and queries from end users through monitoring modules, creating a virtuous circle in the relationship with their customers as they learn more about them and adapt their offering accordingly. Thank you for your attention. I’ll now pass it over to Patricia Pomies, our Chief Operating Officer.

Patricia Pomies: Thanks, Diego, and hello, everyone. So nice to be back. Let’s kick off with our clients and our strategy for expansion. As it is known for some time now, our 100-squared vision guides our efforts to deepen relationships with our clients, expanding our reach to new geographies and offering more services as we grow our collaboration over time. We continue to advance on this path, as this quarter we were able to deliver our highest revenue ever, with greater diversity in our top revenue sources. We currently have 16 clients bringing in more than $20 million in annual revenue and we now have 305 clients that provide more than $1 million of annual revenue, 19.6% more than one year ago. Nearly 70% of our revenue comes from publicly-traded companies and close to 25% from large private enterprises.

We work with 80 S&P 500 companies. To take advantage of the global scale that Globant now has, we have a new global account model with the aim of serving clients across multiple geographies as well as services and platforms, all while focusing the talents of multiple studio networks. Revenue from the Walt Disney Company, our number one client, expanded by 7.8% quarter-over-quarter. The rest of our accounts collectively grew 9.8% quarter-over-quarter and 21.4% year-over-year. Globant is also widening its revenue sources geographically. In Q3, 58.9% of our revenue came from North America, 21.6% from Latin America, 16.5% from EMEA, and 3% from Asia and Oceania. Measuring the success of the relationship and trust we build with each client, the Net Promoter Score, remains a key metric to guide our objectives.

Our current NPS of 80 at quarter’s end reaffirms our clients’ satisfaction and their likelihood of referring us within their organization and their networks. Now, into our headcount. As of September 30, we were 27,505 Globers, of which 93% are IT professionals, representing an addition of 1,412 IT professionals on a sequential basis. Among these incorporations, we are excited to welcome new Globers from Moldova and Vietnam. Our attrition rate for the last 12 months is 9.5%, decreasing 2.1 percentage points versus last quarter, and the lowest in our history. The attrition over Q3 was 2.2%. We are committed to keep delivering the best experience for Globers, ensuring an environment of personal growth, learning, and well-being at every step of their journey.

We will continue driving efficient utilization to manage proper headcount, hiring and attrition effectively. Our current utilization rate stands at 80.5%, and in Q3, we moved to positive net additions on an organic basis. Since Globant’s foundation, we’ve continuously evolved our work scheme, fostering purpose, autonomy, collaboration and innovation. Today, we continue to make Globant a best-in-class organization, crafting, harnessing and improving best practices and industry standards. A decade into our journey with AI, we have a great opportunity to apply reinvention at scale with the wider adoption demand we see in the market. We’ve instituted an AI readiness KPI to ensure that our teams are applying it in line with our strategy. Allow me to highlight a few transformative projects we have embarked on.

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