Diego Tartara: I would like to add to what Martin said or maybe highlight is two different things. Conversations started to shift more into the revenue generating side of things. Whether during last year there was a lot about grooming the operation, which is very good. That makes me actually very happy. Even when we’re talking about the Enterprise Studio, we are now beginning projects and discussions about full migration to the cloud, updating et cetera, which can be as you know very expensive and lengthy type of projects. We are seeing the commitment and the investment on the longer term, more transformative side of things.
Tyler DuPont: Okay. That’s very helpful. Thank you. And just as a follow-up, I wanted to touch on what you guys mentioned regarding the sequential math. As we look through top line growth for 2024, just based on the envelope math here, it looks like the exit rate is somewhere in the 12% -13% neighborhood, let’s call it. So how should we be reconciling that growth profile versus the historical commentary of that high teens 20% plus? Just sort of any dynamics there?
Juan Urthiague : Yes, keep in mind that the first part of the year, we’re talking about growth of around 20% for both quarters. Then in the second half of the year, we are trying to provide a number that will feel comfortable at the beginning of the year. There’s still a lot of uncertainties going on and we didn’t want to set the bar in a place that maybe depending on how the economy evolves and how the rest of the year turns out would put us in a difficult situation. So we are starting where we feel comfortable that we see the sequential growth being very reasonable. When you look at the type of growth that is assumed on a sequential basis, it is quite reasonable given our history. And that’s how we ended up with I think relative to the industry, a very strong year-over-year growth of 16.2%.
Arturo Langa: Our next question comes from the line of Moshe Katri from Wedbush.
Moshe Katri: Hey, thanks. And we’re at some very strong. Martin as you more about strategy. You’ve clearly had exposure to Latin America. I think your numbers lost here. Yes, hear me? Perfect. So let me just restart. Can you hear me now? Okay. So the first one is on strategy. And it seems that you’re going to be investing a bit more in Mexico and Brazil. How big can this be for you guys? Maybe you can give us a feel here, just given the fact that Latin America is a continent is doing much better economically versus North America and Europe. And Latin America as a region actually had almost 20% growth through the quarter. So maybe some color on that, because I think it’s a pretty interesting kind of the —
Martin Migoya: I don’t know if you can hear me, Moshi, because it got cut in the middle, but I would try to articulate the first part of the question, and then I will let Juan. So, Latin America, in my opinion, it would be a very important place moving forward, strategically speaking for the US and for North America in general. So I believe that Latin America is a central place, not just for us to deliver, but also to keep on evolving our business. So as you have seen with the acquisition of Iteris, we’re playing again in Brazil, and I believe that that kind of things will keep on going and we’ll keep on insisting on trying to expand our footprint in Latin America. So again, it’s not just an untapped, still untapped place in terms of delivery, but also a market that is improving a lot and that will keep on gaining strategic importance for the whole world.
So I believe that’s a Globant’s answer to what’s going on a geopolitical way in the world and we are very lucky to have this positioning, but we are taking advantage of that and we’ll keep on investing and having an increase in our presence there. And Juan, if you want to add anything into?
Juan Urthiague : No, what I was going to say, yes, Latin America is about 22% of our revenues. When we look at Brazil and Mexico, those are huge economies, very, very large markets, and they are not even the biggest markets for us within Latin America. So that means that the opportunity that we have to significantly expand our presence in the region is just there. There are very large companies that are growing very, very nicely, some of which we named during the earnings call, where we are really, really performing very, very well. And we see the same needs and the same type of investments in those companies are the ones that we are seeing in the US and in Europe. So we are very confident about our ability to grow in Latin America.
Moshe Katri: Okay, and just to follow up is on gross margins. We’ve had some gross margin pressure throughout calendar ‘23. What should we look for in terms of gross margins in calendar ‘24? And I guess some of it obviously was FX headwinds related. Has that trend kind of reversed itself?
Juan Urthiague : Yes, so no, unfortunately, the FX in Colombia, the FX in Mexico, in Brazil, it continues to, it’s stable. So it has not deteriorated further, but the trend has not changed. It’s just stable, just where it was during Q3 and Q4. So we continue to have those headwinds in front of us. And we expect at this point, we expect our margins to be stable relative to 2023 throughout 2024.
Moshe Katri: And you’re going to keep on using SG&A expense leverage to offset that, just to protect your EBIT margins, right?
Juan Urthiague : Yes, I mean, as always, as we, I mean, first of all, we will keep on investing to grow. That’s not going to change. But at the same time, we will do it in a healthy way, protecting margins as much as we can as always and hopefully as the year progresses and the economy globally starts to get a little more optimist related to the future, there is some additional pricing power to hopefully offset some of those FX headwinds that we are seeing.
Arturo Langa: The next question comes from Divya Goyal from Scotiabank.
Divya Goyal: Good evening, everyone. Great, quarter. I wanted to actually get some color on the fixed price contracts based on some of the discussions we’ve been having with your peers. It seems like there’s increased focus in the industry from a fixed price contract standpoint, if you could provide some color on that.
Martin Migoya: It’s exactly that. Whenever we face a solution where we have nice visibility, we’ve done it before, et cetera. We can engage in those type of contracts without running into a huge risk. So when we have the opportunity, we think it’s a very powerful instrument to gain a client and protect our margins as well. So the Reinvention Studios, which are focused on gaining depth into different industries, have full focus on this, and that’s the increase you have seen. Again, I think in the total proportion, we’re talking about a few points, but I think it’s a very good and healthy trend. It speaks about the work they’ve been doing with the different clients. Typically, these types of engagements are very much transformational. In many cases, we have a commitment towards what we deliver, what we do, and in other, it has a second tier that has to do with the success criteria of the project itself.
Arturo Langa: The next question comes from Sean Kennedy from Mizuho.
Sean Kennedy: Great, thank you. Hi, everyone, and thank you for taking my question. Thanks. So I wanted to ask about Globant Sports and Media Business. Can you discuss in some more detail the sports opportunity, specifically how you attract new clients and durably grow the business?
Martin Migoya: In the Media industry.
Juan Urthiague : No, sports.
Martin Migoya: Sports for us has been extremely important and we have been investing a lot in the space. I believe that there’s an opportunity there not just to render services but also to provide platforms and things that accelerate the solutions to our customers. So I believe that Sportian which is one of the companies that we created associated with LaLiga to be able to leverage that is a very good bet into that space moving forward and by the way the performance that we have seen on that specific company has been pretty rewarding to see how it grew and how we have been able to expand to other markets not just to other markets but also to other sports. Remember Sportian is born based on football, but also now we expanded into rugby, into tennis, into basketball.
By the way, we added Manu Ginobili as one of our members of the board of advisors in Sportian. So we see that on the football space, but also, we see a big expansion into other sports. And that’s nice to see. Also our partnership with FIFA has been instrumental in this idea of evolution in the space. We’re now working on FIFA Plus, but in many other projects now, we are becoming a big partner for FIFA in many different aspects of technology creation. So once you have those anchor clients, being able to keep selling and keep on evolving into other places is much easier. So to your point of how to predict or how to have visibility into what’s coming, when you have those customers, it’s much more easy than just having small customers here and there.
So I believe that’s the core of what we do. And the outlook for what’s coming in that specific space is very good. And the forecast of growth, it’s outpacing a little bit, Globant’s growth as a company. So we’re very happy with that. So I don’t know, Diego or Juan, if you want to add something into that.
