Globant S.A. Q1 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Financial Highlights (vs. Q1 2025 unless noted)

  • Revenue: $607.1 million (+0.7% YoY improvement of 400 bps from prior quarter trajectory; beat high end of guidance; included 200 bps FX tailwind).
  • Top clients drove outperformance: Top 50 clients +5.2% YoY; Top 10 +4% YoY; 2-5 cohort +8.2% YoY (all above company average; many top 20 clients returned to positive growth).
  • Adjusted Gross Margin: 37% (impacted by LatAm currency strength vs. prior year and statutory cost increases; AI Pods noted as future margin tailwind).
  • Adjusted Operating Margin: 14.1% (within guidance; SG&A at 18.5% of revenue).
  • Adjusted Net Income: $65.2 million (10.7% margin).
  • Adjusted Diluted EPS: $1.50 (above midpoint of guidance; absorbed FX headwinds from MXN, COP, BRL).
  • Free Cash Flow: $36.1 million (vs. -$5.7 million in Q1 2025; first positive Q1 FCF since 2019; FCF/adjusted net income >55%).
  • Balance Sheet: $200.5 million cash/short-term investments; $161.2 million net debt. Completed $50 million in share repurchases during Q1 under prior program.

Guidance

  • Q2 2026: Revenue $610-616 million (returns to sequential growth; midpoint implies +100 bps FX tailwind); Adj. Op. Margin 14-15%; Adj. Diluted EPS $1.45-1.55 (43.6M shares).

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Arturo Langa: Good afternoon, and welcome to Globant's First Quarter 2026 Earnings Conference Call. I am Arturo Langa, Investor Relations Officer at Globant. [Operator Instructions] 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 Migoya; our Chief Technology Officer, Diego Tartara; and our Chief Financial Officer, Juan Urthiague, 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 Migoya.

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