Globant Q1 Earnings Call Highlights

Globant NYSE: GLOB reported first-quarter 2026 revenue above its guidance range and said it is seeing early signs of improvement in demand as clients prioritize artificial intelligence-led transformation projects.

The technology services company posted revenue of $607.1 million for the quarter, down 0.7% on a reported basis from the prior year but above the high end of its outlook. Chief Financial Officer Juan Urthiague said the result reflected a 400-basis-point improvement in the year-over-year trajectory compared with the previous quarter and included a 200-basis-point foreign exchange tailwind.

Co-Founder and Chief Executive Officer Martín Migoya said the quarter “appears to mark the trough of this cycle,” with second-quarter guidance calling for a return to sequential growth. He said Globant is reaffirming the midpoint of its full-year revenue outlook while raising the lower end of the range.

AI Pods Take Center Stage

Much of the company’s call centered on Globant’s AI Pods, which management described as AI-native service units that deliver outcomes rather than traditional labor-based services. Migoya said the company’s AI Pods annual recurring revenue reached $32.8 million as of March, with strong growth from the fourth quarter.

The company said AI Pods have been incorporated into 40% of its top 20 revenue-generating accounts, up from 30% in the previous quarter. Globant also reported an AI Pods pipeline of $352 million and said it sees a path to coverage in 70% of its top 20 clients.

Migoya said gross margins for the AI Pods model are “materially above” the company’s blended gross margin, adding that the model could support the company’s margin profile over time as it becomes a larger part of revenue. Urthiague later said the company is assuming only a small positive impact from AI Pods in the latter part of 2026 because the business remains a small portion of overall revenue, even as it grows quickly.

Global Chief Technology Officer Diego Tartara said Globant is operating within the AI era rather than preparing for it. He said the company has overhauled its delivery framework by embedding AI into execution, project management and accountability standards. Tartara also highlighted an “agentic economy” of more than 20 validated cross-industry agentic solutions that can be deployed in AI Pods engagements.

During the Q&A, Tartara said early customer feedback on AI Pods has been positive, citing faster delivery, quality of outcomes and more efficient token consumption. Migoya said the model gives clients more transparency because work can be tied to output and consumption rather than hours.

Top Accounts Outperform Company Average

Management said Globant’s largest clients continued to grow faster than the company overall. Urthiague said revenue from the top 50 clients rose 5.2% year over year, while the top 10 clients grew 4% and the two-to-five client cohort grew 8.2%.

Chief Revenue Officer Fernando Matzkin attributed the performance to Globant’s “100 Squared” strategy, which focuses on large strategic accounts. He said the company is seeing conversations around migrating existing operations or starting new development with AI Pods across many of its top customers.

Matzkin pointed to Disney as an example of an account where Globant is seeing recovery compared with 2025, saying discussions include AI Pods as well as work tied to interconnected customer experiences centered on Disney+.

Migoya also cited traction across sectors, including financial services, healthcare, media and entertainment, gaming, retail, technology, energy, aviation and sports. He said AI is present in 100% of Globant’s pipeline, either as a core element or a satellite component, and that 26% of opportunities are AI core. For deals originated in 2026, that figure rises to 32%.

Margins Pressured by Currency, EPS Tops Midpoint

Globant’s adjusted gross margin was 37% in the first quarter. Urthiague said gross margins were affected by the relative strength of Latin American currencies, especially the Mexican peso, Colombian peso and Brazilian real, as well as statutory cost increases in delivery centers.

Adjusted operating margin was 14.1%, with selling, general and administrative expenses at 18.5% of revenue. Adjusted net income totaled $65.2 million, representing a 10.7% adjusted net income margin. Adjusted diluted earnings per share were $1.50, above the midpoint of guidance.

Urthiague said adjusted EPS absorbed “meaningful FX headwinds” and would have been higher on a currency-neutral basis. In response to an analyst question, he said first-quarter gross margin faced about one percentage point of foreign exchange headwind compared with the prior quarter.

The company ended the quarter with $200.5 million in cash and short-term investments and $161.2 million in net debt. Free cash flow was $36.1 million, compared with negative $5.7 million in the first quarter of 2025. Urthiague said it was the first time Globant generated free cash flow in a first quarter since 2019.

Guidance Points to Sequential Growth

For the second quarter, Globant expects revenue of $610 million to $616 million, adjusted operating margin of 14% to 15% and adjusted diluted EPS of $1.45 to $1.55. The company said the midpoint of second-quarter revenue guidance includes a positive foreign exchange tailwind of 100 basis points.

For the full year, Globant expects revenue of $2.462 billion to $2.508 billion, implying 0.3% to 2.2% year-over-year growth with about 100 basis points of foreign exchange tailwind. The company continues to expect adjusted operating margin of 14% to 15% and adjusted diluted EPS of $6.10 to $6.50.

Urthiague said the company expects sequential growth in the second, third and fourth quarters. He said the second-half outlook is supported by more working days and four large customer contracts that are already signed and scaling, including work with a professional services company, a large technology company, a gaming company and a private equity-backed company.

Asked why Globant did not raise its full-year guidance after the first-quarter revenue beat, Urthiague cited uncertainty in the Middle East. He said the company wanted to remain “in a safe place” and avoid taking unnecessary risk in its outlook.

New Buyback Program Authorized

Globant said it completed its prior share repurchase program during the second quarter and that its board authorized a new repurchase program of up to $125 million over the next six quarters. Migoya said the program represents close to 7.5% of the company’s market capitalization at the time of the call and close to 15% in aggregate between the two plans.

Urthiague said the company will balance repurchases with investments in growth initiatives, particularly AI Pods. In response to a question about mergers and acquisitions, Migoya said Globant continues to evaluate opportunities, but Urthiague noted that the company’s own stock is trading at a low multiple and any acquisition would need to meet a clear strategic need.

Migoya closed the call by saying Globant is confident in 2026, citing AI-native services, stronger top-account performance and the company’s pipeline. “This is our moment,” he said, describing the technology services market as being reshaped by AI and agentic delivery models.

About Globant NYSE: GLOB

Globant is a digitally native technology services company founded in 2003 in Buenos Aires, Argentina. Specializing in software development and digital transformation, Globant partners with enterprises to conceive, design and engineer software products and platforms. The company leverages agile methodologies and proprietary delivery frameworks to accelerate projects in areas such as cloud migration, user experience design, data analytics, artificial intelligence and blockchain-enabled solutions.

Globant's service offerings span strategy consulting, custom software engineering, digital experience design and managed services.

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