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Edited Transcript of GLOB.N earnings conference call or presentation 18-Feb-21 9:30pm GMT

·53 min read

Q4 2020 Globant SA Earnings Call Luxembourg Feb 22, 2021 (Thomson StreetEvents) -- Edited Transcript of Globant SA earnings conference call or presentation Thursday, February 18, 2021 at 9:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Amit Singh Globant S.A. - Head of Finance & IR for U.S. * Juan Ignacio Urthiague Globant S.A. - CFO & IR Officer * Martín Migoya Globant S.A. - Co-founder, Chairman, CEO & President * Patricia Pomies Globant S.A. - Chief People Officer & Chief Delivery Officer ================================================================================ Conference Call Participants ================================================================================ * Arturo Langa Itaú Corretora de Valores S.A., Research Division - Research Analyst * Bryan C. Bergin Cowen and Company, LLC, Research Division - MD & Analyst * Cesar Alejandro Medina Morgan Stanley, Research Division - Equity Strategist * Diego M. Aragão Goldman Sachs Group, Inc., Research Division - Equity Analyst * Margaret Marie Niesen Nolan William Blair & Company L.L.C., Research Division - Analyst * Steven Lester Enders KeyBanc Capital Markets Inc., Research Division - Associate * Surinder Singh Thind Jefferies LLC, Research Division - Equity Analyst * Tien-Tsin Huang JPMorgan Chase & Co, Research Division - Senior Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Amit Singh, Globant S.A. - Head of Finance & IR for U.S. [1] -------------------------------------------------------------------------------- Good day, and welcome to Globant's Fourth Quarter 2020 Earnings Conference Call. I'm Amit Singh, Head of Finance and Investor Relations for the U.S. (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. Our speakers today are Martín Migoya, Co-Founder and Chief Executive Officer; Juan Urthiague, Chief Financial Officer; and Patricia Pomies Pomies, Chief Delivery and People Officer. 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 would now like to turn the call over to Martín Migoya, our CEO. -------------------------------------------------------------------------------- Martín Migoya, Globant S.A. - Co-founder, Chairman, CEO & President [2] -------------------------------------------------------------------------------- Thanks, Amit, and hello, everyone. As I join you today, we look back on quarter 4, but I'd like also to reflect on the full year of 2020. We all faced unprecedented change from the major events of the year and saw an accelerated digitalization, both in business and our own personal lives. Globant responded by helping organizations adapt to this change. In Q4, we made $232.6 million in revenue, coming to a 26.2% year-over-year growth. For the full year 2020, we made $814.1 million, up 23.5% from the previous year. Looking forward, we will keep on going. There's a great opportunity for Globant to maintain strong revenue growth over the long term. We are here to reinvent the professional services industry. It is not just about technology or software products when, in fact, the human capabilities, creativity and innovative mindset of the organization are key to a successful transformation. Globant's true value comes from our future-centric vision. We create a way forward for our clients to become what we call augmented organizations. We work alongside them to bring together strategy, sustainable business models, digital trends, AI and inclusive culture to unleash their potential. To do this, we're focusing on 6 pillars that impact every dimension of the organization: one, sustainable business strategy; two, culture and agility; three engaging experiences; four, adaptive organizations; five, technology and data; and six, augmented capabilities. Our studios continue to bring together deep understanding of the latest technologies and trends. The studios, combined with our accelerators, allow us to deliver these transformations across all of these pillars. Let me double-click on some of these pillars. Like I say, to deliver true digital transformation, we pay special focus on rethinking business models with our customers. On this line, we took a step further on December 18. We welcomed the newest member of our family, Bluecap. This Barcelona-based company excels in the value-added consulting, particularly in financial services. Their team of 160 consultants has a high-end expertise with some of the largest players, such as Santander, CaixaBank and Sabadell. I'm very enthusiastic to have Maite Barrera, Bluecap's Founder and CEO, already working with Globant's senior executive team to craft our way forward together. Bluecap's team will be key to continue strengthening our consulting portfolio in this vibrant sector and beyond. Our future centric approach also means putting sustainability at the forefront. In this new green economy, leaving sustainability on the side is no longer an option. Under our 6-pillar approach, we provide organizations with a long-term road map to create new inclusive business legitimacy. Finally, augmented capabilities means bringing AI to enhance every area, process or service of the organization. An example of this is augmented coding. With it, we are already reinventing the concept of software creation in many of our clients as we boost coding with artificial intelligence. As there was a major social change and a global focus on equal opportunity, at Globant, this has always been a focus. Diversity is in our DNA. It is something that we celebrate both within our company and with our stakeholder community. At last quarter's earnings call, Pato and I shared with you our excitement about Women that Build awards. We wanted to recognize the overlooked accomplishments of women in technology, and we want to inspire more of them to innovate, lead and embrace entrepreneurship. The turnout surpassed all expectations. It was inspirational to hear the stories of how many of these women blew away obstacles in a positive and uplifting way for their communities. I look forward to more events like this one. Diversity in technology isn't just an initiative for our sector. It is good for our company, too. Our teams benefit from having a more rounded perspective to solve the world's problems. Diversity is what makes the Globant concept work. To go deeper in this concept, Patricia Pomies is with us again, our Chief Delivery and People Officer. Pato, please? -------------------------------------------------------------------------------- Patricia Pomies, Globant S.A. - Chief People Officer & Chief Delivery Officer [3] -------------------------------------------------------------------------------- Thanks, Martin, and hi, everyone. It's a pleasure to be here again with you to discuss these ideas. Within our Be Kind concept, the Women that Build award has been the biggest thing we have done so far. The response was phenomenal. We received over 10,000 nominations from 15 countries. Within each region, nominees will present it to a panel of judges of diverse fields. In all, we had 60 leaders participating on our judging panels throughout the world. The best part about Women that Build is that allow us not only to recognize these fantastic women, but to bring attention to their efforts and the issue of gender equality in our technology sector. We share their stories in our podcast and on social media and engage with the many stakeholders from academia, civil society, government and the private sector all over the world. I invite you all to check out the result and the awesome stories of these women at womenawards.globant.com. We have already grown stronger and benefited from this better outreach with our community, and we will continue promoting diversity as one of our key values. This month, I am pleased to announce that Globant will join the Board of the National Action Council for Minorities in Engineering. NACME is the largest provider of college scholarships for underrepresented minorities pursuing degrees at the schools of engineering. We look forward to this collaboration and also to hire more minorities to join our team at Globant. In December, we also launched a new education initiative. Globant has teamed up with tech power house, Mercado Libre, on our joint program known as Certified Tech Developer. This is a training program designed to achieve the rapid job placement of thousands of young people from Latin America in the technology industry. To cast a diverse and inclusive net of participants, Globant and Mercado Libre are providing 2,500 scholarships. We aim to train more than 15,000 young people throughout the region. The program will be carried out together with Digital House. It is committed to creating a new academic concept based on agile methodologies with a strong practical orientation, so the student can gain experience. And just as we focus on giving opportunities to those outside of Globant, we keep investing in our own people as well. We are crafting augmented careers for our Globers. Some of you may remember my introduction of Globant University in 2020 aimed to upskill and reskill our Globers to face digital acceleration. On this same platform, we have now developed My Growth, specifically designed to help Globers boost their career path and enhance their learning experience at the company. I'm particularly proud of this initiative, and it is a clear example of how we constantly reinvent our employee experience. On another note, I'm glad to see every day more diversity in everything we do. We have recently put together our first e-sports team. The Globant Emerald team competes in the League of Legends league. We are very proud that our team has become one of the first in Latin America to include women as part of the starting lineup. It is a major milestone for e-sports, and we are really proud to be impacting gender diversity on so many levels. Go gamers. Thanks again, everyone. Nice to be with you. Martin? -------------------------------------------------------------------------------- Martín Migoya, Globant S.A. - Co-founder, Chairman, CEO & President [4] -------------------------------------------------------------------------------- Thanks, Pato. Now some news about our expansion and new opportunities. We are passionate about bringing opportunities to where the talent is. We will keep expanding to offer more careers to professionals around the world, bringing more diversity into our company culture. In Spain, we will be opening a new office in Málaga, where we plan to hire 200 professionals to join our team. Now I would like to introduce our new tool, FluentLab. This is one of our accelerators to help our clients create better customer interactive experiences. Backed by patented technology, this framework makes it easy to create AI-powered conversational interfaces that remain human like. Clients can overcome the typical hassles in building an interface, so that they can communicate with their customers, resolve issues and sell in a more intuitive, efficient and fluid way. As a result of the digital acceleration brought about by the pandemic, we are optimistic about the growth of this addressable market. To learn more about it, visit fluentlab.ai. To be an augmented organization, we will keep investing in technology expertise and our management team. Therefore, I'm happy to share that we have brought Michael Feathers to Globant as Chief Architect. Michael is one of the most renowned software designers and is the ultimate authority in working with and modernizing legacy code. He will focus on helping Globant's clients transform how they create and deliver digital products. Now some stories about our accelerated relationships with our clients. For example, we won a strategic data analytics projects at Nautilus, a home fitness company that will help drive data-driven insights as an enabler in the company's digital transformation strategy. We also began partnering with McAfee to build a new infrastructure for data-driven improvement in its channel management initiatives. At Finning, Globants continue to expand its service and transformation initiatives, including digitizing its dealership offering. Our partnership with ViacomCBS continues to grow as we execute multiple projects and programs that support the development of its over-the-top product portfolio. In the gaming space, Globant continues to work in the highly anticipated Harry Potter title for Warner Bros. Games. We are working with Spectrum Hub, a start-up dedicated to provide employment opportunities for individuals with autism via a digital tool and education. We are designing and developing the web platform and providing business and product strategy consulting. The purpose is to enable their business to expand and scale as their program evolves. Our first release of the web platform will be a corporate education initiative on how to start a successful autism in the workplace program. In the beverage sector, we're working with AB InBev, the world's largest consumer beverage company. They face a continuous challenge of achieving the highest standards of operational excellence. They understand that digital capabilities are the way forward for efficiency and grow. We have been working on their digital transformation in Southern Latin America, applying AI to help with revenue management, sales and operations throughout the business. We also work with their team and senior leaders to develop their digital capabilities. We're not only expanding with our reach with new customers. We are deepening our relationships with our current clients as well. Over recent months, we have been working with great minds to take them to the next level in the ad tech industry. This sector is going through exponential growth brought on by the pandemic. The 2021 plan involves building the next generation of the digital learning platform targeted through the United States. No matter how much this company grows, we still focus on the same thing, disruptive innovation from the ground up. That's why I'm excited about our latest venture, ELSA. ELSA is an app that uses artificial intelligence to help English language learners with their pronounciation and adoption in a fun and intuitive way. Through our start-up accelerator, Globant Ventures, we invested in this English-speaking AI app, together with Google, Monk, Endeavor Catalyst and other BC players. We are really excited about this operation as we see the value in AI for education. We will continue looking for more ways to further improve humankind with AI. Check out the app on Google Play or the App Store. Finally, I want to close out by reaffirming our conviction. The technology can be a force for good. Companies all over the world woke up to the need to go digital in 2020. We continue to see strong demand and a healthy pipeline ahead. For 2021 and beyond, we'll keep applying our talent to help them make it happen. With that, I'll hand it over to Juan Urthiague, our CFO, to go into the financials. Juan, please, and thank you very much. -------------------------------------------------------------------------------- Juan Ignacio Urthiague, Globant S.A. - CFO & IR Officer [5] -------------------------------------------------------------------------------- Thanks, Martin, and good afternoon, everyone. I hope you are all doing well and staying safe. Let me start by summarizing the results of our fourth quarter and full year 2020. I will then discuss our guidance for the first quarter and the full year 2021. We are very pleased to announce another quarter of record revenues and strong financial performance. Our revenues for Q4 amounted to $232.6 million, representing a solid 26.2% year-over-year growth. On a sequential basis, our revenues for Q4 increased 12.3%, showing a healthy trend. Q4 revenue growth was 26.6% year-over-year in constant currency. In line with our expectations, the overall demand environment largely stabilized in the second half of the second quarter, and we have witnessed an improvement in the end markets since then, which is reflected in our strong sequential revenue growth, both in Q3 and Q4. While the COVID-19 pandemic is still ongoing, it did not have any incremental impact on our Q4 results. That said, we do still remain cautious about any impact to our end market due to the potentially new waves of lockdowns, like the ones we are currently witnessing in some parts of Europe, LatAm and the U.S. However, we remain very bullish about the demand environment post the COVID-19 crisis and are encouraged by the ongoing positive trend in our bookings. As discussed in our previous earnings call, we always prioritize the health and safety of our employees, and almost all of our employees continue to work from home, while maintaining seamless delivery of services to our customers. Our delivery and people teams continue to develop and execute strong and innovative initiatives to keep employees' productivity and morale very high. Disney was our largest customer for the quarter, growing strongly at 14.8% year-over-year and 10.4% quarter-over-quarter. We continue to be very well diversified within Disney, serving the majority of its business units. Other than Disney, rest of our accounts collectively grew at a solid 27.7% year-over-year, with revenues from top 5 and top 10 accounts increasing at a robust rate of 40.2% and 40.8%, respectively, over the fourth quarter of 2019. Outside of Disney, rest of accounts collectively also grew strongly at 12.5% quarter-over-quarter as we experienced improvements in most industry verticals. Moreover, during the quarter, we continued to successfully cross-sell services with the companies we acquired during the year. Our customer concentration numbers for Q4 2020 displayed improvement compared to the last quarter, with our top 1, top 5 and top 10 accounts representing 10.7%, 30% and 42.9% of revenues. Looking at diversification of our revenues by industry verticals, it is clear that Globant's value proposition and service offerings are attractive to enterprises across all industries, and we remain balanced in terms of verticals exposure. Our top 3 industry verticals for the quarter were banks, financial services and insurance, with 23.7% of revenues, media and entertainment with 21.8% of revenues and consumer retail and manufacturing with 13.8% of revenues. Regarding the progress of our 100-Squared strategy, during the last 12 months ended December 31, 2020, we had 13 accounts above $10 million in annual revenues compared to 14 accounts for the same period last year. This reflects the impact from some of our travel customers hurt by the COVID-19 pandemic. That said, we had 129 accounts with more than $1 million of annual revenues compared to 107 one year ago. Overall, we continue to expand our relationships with our key accounts, the base for our continuous growth. In terms of geographic regions, during the fourth quarter of 2020, 65.9% of our revenues were in North America, 24.3% in Latin America and others and 9.8% were in Europe. In Europe, we witnessed a strong acceleration in revenues, growing at 142.9% year-over-year and 43.6% on a sequential basis. Also Latin America and others show continued strength, growing at 54% year-over-year and 22.4% sequentially. To note, in 2020, the majority of the impact from COVID-19 was in the travel and hospitality vertical, primarily in North America. During the fourth quarter of 2020, 85.8% of our revenues were denominated in U.S. dollars, providing good protection to our top line against currency fluctuation. Turning now to profitability. Our adjusted gross profit for the period increased to $92 million, representing 39.6% adjusted gross margin compared to $73.5 million, representing 39.9% adjusted gross margin in the fourth quarter of 2019. Year-over-year, adjusted gross margin decline is mainly explained by a slightly lower utilization. However, on a sequential basis, adjusted gross margin improved 60 basis points, helped by relatively stable utilization and strong pickup in demand, partially offset by salary increases and FX fluctuations. We finished the quarter with 16,251 Globers, 15,290 of which were technology, design and innovation professionals. We continued our strong hiring in Q4 with a robust addition of 1,854 IT professionals sequentially. IT professionals were up around 39% year-over-year as we prepare to fulfill the strong demand in front of us. Over the last few years, Globant has invested heavily in establishing a robust training and hiring infrastructure across the globe, which gives us a strong ability to seamlessly ramp up hiring and training as required. At this moment, we don't foresee any challenges in finding the right talent to meet the demand. In fact, during Q4, we achieved the largest organic increase in IT professionals in our history. Attrition for the past 12 months continued low at 13% compared to 14.6% in Q4 2019, with a significant improvement in most talent development centers. As discussed in the previous earnings calls, going forward, we view 14% to 16% attrition rate as the normalized level for Globant. Adjusted SG&A came at 19.9% of our quarterly revenues, a decrease of 10 basis points compared to Q3 2020 and a decrease of 30 basis points year-over-year. We continued investing for the future primarily to expand our sales coverage in our target markets, mainly in Europe. We believe this focus will help us efficiently capture the vast global demand for our services, especially post the COVID-19 crisis, and also helps us maintain a strong long-term revenue growth profile. As a result, our adjusted operating income for the quarter amounted to $37.9 million or 16.3% of revenues compared to $30.4 million or 16.5% of revenues for the fourth quarter of 2019. On a sequential basis, adjusted operating margin improved 100 basis points. As our revenue growth profile and utilizations continues to improve, it will have a positive impact on our adjusted operating margin. At the same time, we will continue to strongly invest in the company, taking advantage of the huge opportunity in front of us. Together, this leads us to believe that adjusted operating margin will trend in the 15% to 17% range in the near and midterm. Share-based compensation for the fourth quarter of 2020 was $5.2 million, representing 2.2% of total revenues for the period as compared to 3.2% for the same period last year. This expense is mainly related to the plan of restricted stock units granted to certain key executive and directors of the company as part of our long-term retention plan. Finance expenses were $3 million in the fourth quarter of 2020 compared to $2.5 million for the same period last year. This loss is mainly composed of interest expenses on lease liabilities and interest expenses on our borrowings. Other financial results net amounted to a gain of $1.4 million for the quarter compared to a loss of $0.5 million during the fourth quarter of 2019. This item is primarily composed of FX results from monetary assets and liabilities in local currencies, result from our hedging strategies and gains from transactions with bonds. In the fourth quarter, we recorded a gain of $1.7 million in other income and expenses net. Approximately $1.1 million were related to the fair value of the contingent consideration associated with one of our acquisitions and were removed from the adjusted figures. Our IFRS effective tax rate for the quarter was 32.7%, coming above our guidance, impacted by the retroactive effect of a new regulation with higher-than-expected taxes in one of our main talent development centers. Adjusted net income for the fourth quarter of the year totaled $28.5 million, representing 12.3% adjusted net income margin, compared to $24.2 million, representing 13.1% adjusted net income margin for the fourth quarter of 2019. On a sequential basis, adjusted net income margin increased by 50 basis points. Adjusted diluted EPS for the quarter was $0.70 based on 40.9 million average diluted shares for the quarter compared to $0.64 for the fourth quarter of 2019 based on 38 million average diluted shares for that quarter. Moving on to the balance sheet. Our cash and investments as of December 31, 2020, amounted to $298.2 million, while borrowings amounted to $26 million. During the fourth quarter, we generated healthy free cash flow of $20.7 million, paid $50.9 million for acquisitions and repaid $50 million of our credit facility. Full year 2020 was a solid year for free cash flow generation, despite the ongoing COVID-19 environment, and our free cash flow to adjusted net income was around 50%, in line with the last 2 years. We also continue to successfully execute on capital allocation strategy with integrations of recently acquired companies going as planned. Now let's talk about the full year 2020 performance. Revenues for 2020 were $814.1 million, implying a solid 23.5% year-over-year growth. Globant delivered robust 20%-plus year-over-year revenue growth in a year in which we witnessed one of the highest levels of macro uncertainty in recent times. We started 2020 in a very strong footing, but faced pressure on our revenues during Q2 due to the COVID-19 pandemic. However, since then, the revenue and bookings profile has been trending up. This year has proved that the digital services provided by Globant are extremely critical for the growth of corporations across industry verticals. Our 2020 M&A deals also performed strongly, and we are successfully cross-selling services with our recently acquired companies. Adjusted gross profit for 2020 was $319.2 million or 39.1% adjusted gross margin compared to $266.5 million or 40.4% adjusted gross margin for the full year 2019, a decrease of 130 basis points year-over-year. This margin compression was due to the impact of COVID-19 in the form of lower utilization, some impact to our revenues and some selective temporary client price concessions in the early part of this year. Adjusted SG&A for 2020 accounted for 20.2% of revenues, increasing 30 basis points compared to last year, primarily due to the impact of COVID-19 on our revenues. During 2020, we continue to invest to capture the significant opportunities in front of us. Adjusted profit from operations for 2020 was $124 million or 15.2% adjusted profit from operations margin compared to $112 million or 17% adjusted profit from operations margin for last year, representing a decrease of 180 basis points and driven primarily by the impact of COVID-19. As you remember, Globant decided to not lay off its employees in response to the top line pressure from COVID-19 and kept a higher-than-normal talent pool during the early part of this year, which in turn allowed the company to accelerate its growth as the demand environment started to normalize. Share-based compensation expense for 2020 amounted to $24.6 million, representing 3% of revenues compared to $19.9 million, representing 3% of revenues for 2019. As explained before, this expense is mainly driven by our long-term incentive program and was in line with our target. Finance expenses were $10.4 million for the full year 2020 compared to $6.7 million for the last year. This loss is mainly composed of interest expenses on lease liabilities and interest expenses on borrowings. Other financial results net amounted to a gain of $3.6 million for the year compared to a loss of $5.9 million during 2019. This item is primarily composed of FX results from monetary assets and liabilities in local currencies, results from our hedging strategies and gain from transaction with bonds. During 2020, we recorded a loss of $1.9 million in other income and expenses net. This was mainly related to the remeasurement of the fair value of contingent consideration associated with our acquisitions. Given that this impact comes from M&A transactions, as mentioned above, the majority of this line item is adjusted from our non-IFRS measures. Our IFRS effective tax rate for the year was 29.2%, coming above our guidance, primarily impacted by the retroactive effect of a new regulation with higher-than-expected taxes in one of our main talent development centers. Adjusted net income for 2020 was $97.3 million or 12% adjusted net income margin compared to $86.1 million or 13.1% adjusted net income margin for the last year. Adjusted diluted EPS for 2020 was $2.45 based on 39.7 million average diluted shares for the year compared to $2.29 for the last year based on 37.7 million average diluted shares. To wrap up, I would like to share with you our outlook for Q1 and for the full year 2021. We have decided to reinstate our full year guidance, although we note that, given the ongoing COVID-19 pandemic, there are a number of factors, which we may not be able to accurately predict, including the demand environment trend throughout 2021. Based on current visibility, we expect Q1 2021 revenues to be at least $258 million or 34.7% year-over-year growth. At this point, we do not expect any FX impact to our first quarter revenues. Q1 adjusted operating margin is expected to be in the 15% to 17% range, and adjusted diluted EPS is expected to be at least $0.79, assuming 41.2 million average diluted shares outstanding for the quarter. Regarding the full year 2021, we expect revenues to be at least $1.047 billion or 28.6% year-over-year growth. We currently assume no FX impact to our full year 2021 revenues. For 2021, we expect our adjusted operating margins largely stable in the 15% to 17% range, while we continue to invest in training programs in cutting-edge technologies and expand our sales coverage. IFRS effective tax rate is expected to be in the 25% to 27% range for both Q1 2021 and the full year 2021. At this point, we expect the tax rate to be towards the lower end of this range. Finally, we expect our adjusted diluted EPS to be at least $3.20 for the full year 2021, assuming 41.5 million average diluted shares outstanding for the full year. Thanks, everyone, for participating in the call, for your coverage and support. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Amit Singh, Globant S.A. - Head of Finance & IR for U.S. [1] -------------------------------------------------------------------------------- Thank you, Juan. Thank you, Martin. And thank you, Pato. (Operator Instructions) So the first question today comes from the line of Tien-Tsin Huang from JPMorgan. -------------------------------------------------------------------------------- Tien-Tsin Huang, JPMorgan Chase & Co, Research Division - Senior Analyst [2] -------------------------------------------------------------------------------- So I wanted to -- obviously, impressive double-digit growth sequentially, and it looks like you're expecting that again in the first quarter. Disney was double digit as well in the fourth quarter. So my question for you, Martin and Juan, is just thinking about your outlook and how you put it together this year versus last year, what would be different in your mind? I'm very curious -- obviously, I always ask about visibility, but I'm curious. Is it more broad-based? Is it a lot more focused on some key accounts in terms of the potential to drive some of this continuation of growth? I'm just curious how your -- you view this outlook differently from what you did a year ago. -------------------------------------------------------------------------------- Martín Migoya, Globant S.A. - Co-founder, Chairman, CEO & President [3] -------------------------------------------------------------------------------- Sure. Look, we see demand coming from pretty much every industry, in every sector, in every company. And it's not that we are seeing -- I mean, Disney growing and others not growing. Or as I said, this new reality, like triggered and turned on the demand and turned on the desire of the companies -- of every company to go digital, and that's kind of pushing and helping us to be -- to have that thing across the board -- to have that demand across the board. So it's not a specific sector. I could not mention one because when you see them all separated, you see demand on the automation sector, on the finance sector, on the ad tech sector, on the -- even in the entertainment sector. We need to see -- still need to see the recovery from the airline sector and, I would say, hospitality sector, in general. But I would say that all the other sectors are still very, very fast. And as I said before, on my past earnings call, companies like LatAm are doubling down, saying, "Okay. This is our moment to remend the way we operate," and we are helping them with those kind of things. So even in those sectors that are not blooming or not growing now, we see investments happening and taking advantage of this moment to make the digital transformation. -------------------------------------------------------------------------------- Tien-Tsin Huang, JPMorgan Chase & Co, Research Division - Senior Analyst [4] -------------------------------------------------------------------------------- Yes. So thinking about the moment as my follow-up, and a similar question around acquisitions, do you see the potential to do more in the way of acquisitions to sort of satisfy some of this growth you're seeing from the client base? Or is this potentially more of a year for you to focus internally and focus organically, et cetera? -------------------------------------------------------------------------------- Martín Migoya, Globant S.A. - Co-founder, Chairman, CEO & President [5] -------------------------------------------------------------------------------- Organic growth has been like the main thing this year. We did a couple of very interesting acquisitions, like the one we did with Bluecap in Barcelona. They have an amazing team and is pushing -- they're pushing us into new landscape that we never saw before, which is pretty interesting. So we'll continue doing things that make sense for us. That generates like a new tool for our business development guys to have in front of their customers. And I'm obsession with that. And the fact that every day, we're competing against all our really great competitors we have out there. And we need to have the tools to win the game. It's something that keeps me up at night, and this is -- if you need to see how we will keep on growing through the inorganic space, you need to see how Globant will keep on adding tools into that portfolio to become more effective each time we are in front of a customer. But organic growth has been great, is being great. And the outlook for this year, as I said, is really a pretty good, pretty good, pretty unheard of. -------------------------------------------------------------------------------- Juan Ignacio Urthiague, Globant S.A. - CFO & IR Officer [6] -------------------------------------------------------------------------------- Maybe, Tien-Tsin, just to add on top of that. The organic growth that we continue to see the recovery after Q2 is amazing. And the expectation for next year, the embedded organic growth in that number is already approximately 20% organic. And we are just starting the year, right? Of course, we're guiding -- taking a prudent approach because COVID is still around. But we still think that organic growth is going to keep on improving as it has been the case throughout the year since the pandemic. -------------------------------------------------------------------------------- Amit Singh, Globant S.A. - Head of Finance & IR for U.S. [7] -------------------------------------------------------------------------------- The next question is going to come on the line of Bryan Bergin from Cowen. -------------------------------------------------------------------------------- Bryan C. Bergin, Cowen and Company, LLC, Research Division - MD & Analyst [8] -------------------------------------------------------------------------------- Guys, I wanted to ask on the workforce here. So even if we take out Bluecap, it looks like you're still up 12% or 13% sequentially on the billable base. Can you comment on the key regions where you're adding that headcount? And also how are you thinking about how the kind of the evolution of how work gets delivered? Are you adding headcount on -- in regions under the assumption they're going to be in centers or more of a virtual model? -------------------------------------------------------------------------------- Juan Ignacio Urthiague, Globant S.A. - CFO & IR Officer [9] -------------------------------------------------------------------------------- Maybe, Martin, I can take the first part, and then if you want to comment on that. So thank you for the question, Bryan. Yes, one of the key decisions back in Q2 was to keep our people in the company, to keep the brand that we have been building in the shop market very strong and to be ready once the demand would recover to ramp up our revenues and, of course, to ramp up on our engineers and designers. And what we have seen, as we discussed over the last few calls, is a continuous improvement in terms of demand, and we ended the year very, very strong. We had a record December in all our history in terms of hirings. We're hiring -- we are growing quite a lot in India. We are seeing very good traction there. The operation in Brazil and Mexico keeps also improving. Brazil was a challenge for a while, and we were able to make it happen, and we keep on growing there, and Mexico as well, right? Then all the other countries more or less stayed the same. All of them grew in absolute numbers. Argentina decreased a little bit as a percentage of the total headcount, but also grew in an absolute number. And we're a global company. We're becoming more global as we speak. When you look at our revenue breakdown for this year, you see a much more balanced portfolio with the U.S. still leading, but also with very good traction in Latin America, very good traction in EMEA. And of course, our customers, the deals that we are going after are more global, right? And when you have a global customers and global deals, you start getting request for operations in other regions in a larger scale. So you should expect more growth coming from India, more growth coming from Eastern Europe, also Continental Europe and the U.S. and pretty much everywhere. I mean, not much difference there. I don't know, Martin, if you want to -- or Pato, if you want to... -------------------------------------------------------------------------------- Martín Migoya, Globant S.A. - Co-founder, Chairman, CEO & President [10] -------------------------------------------------------------------------------- No, I think, after listening the question, I forgot the second question. Listening, the answer, sorry. -------------------------------------------------------------------------------- Bryan C. Bergin, Cowen and Company, LLC, Research Division - MD & Analyst [11] -------------------------------------------------------------------------------- Yes, as far as the workers go, you're hiring under the assumption they're going to go back to delivery centers. Are you doing this more of a hybrid and remote model for the future as you're adding headcount globally? -------------------------------------------------------------------------------- Martín Migoya, Globant S.A. - Co-founder, Chairman, CEO & President [12] -------------------------------------------------------------------------------- Do you want to take it, Pato? -------------------------------------------------------------------------------- Patricia Pomies, Globant S.A. - Chief People Officer & Chief Delivery Officer [13] -------------------------------------------------------------------------------- Yes, I can take this. I mean, well, as you know, today, we are still working from home. I mean, our offices and -- of course, they are prepared to start whenever we need or if there is any client that have any specific needs there. But of course, we are putting our Globers first, and we are taking care of that. So our working from home framework is working great. I mean, we have a problem that the productivity is still, I mean, higher than ever, and we are still growing there. So also, I mean, the quality of the delivery, I mean, is on top of our line these days. I mean our clients, we have been able to partner with our clients in this pandemic times. So I think it is a really strong year that demonstrated we are prepared to keep on working from home. Of course, if there is any special need, of course, we have any clients that need something on the office, I mean, we have the specific COVID protocol to take care of all them. -------------------------------------------------------------------------------- Bryan C. Bergin, Cowen and Company, LLC, Research Division - MD & Analyst [14] -------------------------------------------------------------------------------- Okay. And just a quick follow-up here. As you're adding headcount, we've noticed you've got a lot in the last 2 years. And as we look at the numbers per capita revenue, that has come down. So I'm just trying to think about, as you're adding so much, how are you considering worker productivity? And how should billable per employee metrics trend as you kind of walk through '21 and into '22? -------------------------------------------------------------------------------- Juan Ignacio Urthiague, Globant S.A. - CFO & IR Officer [15] -------------------------------------------------------------------------------- Yes. Thank you, Bryan, I'll take that one. So there's a combination of factors impacting the revenue per head number. On the one side, if you look at Globant back in 2017 compared to now, the on-site teams were about 11% at that time. Now they are between 5% and 6%. That was pretty much driven a lot by our customers. They basically were getting a very good value, and they were getting very good projects delivered from nearshore locations. Keep in mind that we are very close to -- we have the same time zones than our customers in most cases, right? So in a way, we were getting that type of demand that typically comes at a slightly lower rate. Second thing is that we are investing heavily, as Martin discussed before, on some internal projects like augmented coding, and that takes people that could be billed. But we believe it's a game changer, so we definitely prefer to invest some of that money on that front. And finally, again, as we keep on seeing this huge -- or this large demand and need, and that also strengthened after COVID, right? We don't want to stop bringing people, training people and having them ready. Keep in mind that we managed our gross margin in the 39%, more or less 38% to 40% range. It was 39.1% this quarter -- 39.6%, sorry, this quarter. So even with that -- with a slightly lower revenue per share, we were able to keep our margins in the gross margin number. And what we do see now going forward is an improvement. We are now -- when we look at the projections for Q1 and for the rest of the year, we are definitely starting to see some of that revenue coming back, some of those investments starting to pay off. And eventually, that will lead into a higher revenue per head. But again, we do take care about margins, as you know, as you've seen us over the last several years, but we also need to invest in the future. And these investments, we believe, are again game changers in the industry, and that's why that number has come down a little bit. I don't know, Martin, if you want to add anything, but that's pretty much how we see it. -------------------------------------------------------------------------------- Martín Migoya, Globant S.A. - Co-founder, Chairman, CEO & President [16] -------------------------------------------------------------------------------- Yes. Juan, basically to say that the revenue per head is coming down mainly -- there's several factors, as Juan said, but mainly because the combination of onshore onsite -- sorry, onshore, offshore changed. As the pandemic evolved, we showed the model was working perfectly without that much coverage on site, and that changed a little bit the revenue per head. That was the largest component. And then we are investing in some other tools for the future, like augmented coding and things like that. That is also taking some effort and some capital to make it happen. So that's why that number gets a little bit distorted, but the important thing here is to focus on the margin -- on the gross margin, and that is being maintained. So the quality of our business is pretty much the same. -------------------------------------------------------------------------------- Amit Singh, Globant S.A. - Head of Finance & IR for U.S. [17] -------------------------------------------------------------------------------- Next question, Maggie Nolan from William Blair. -------------------------------------------------------------------------------- Margaret Marie Niesen Nolan, William Blair & Company L.L.C., Research Division - Analyst [18] -------------------------------------------------------------------------------- Juan, you mentioned positive trends in bookings a couple of different times. Is there any additional detail you can share on that? -------------------------------------------------------------------------------- Juan Ignacio Urthiague, Globant S.A. - CFO & IR Officer [19] -------------------------------------------------------------------------------- Yes. Sure. So this is something that we've been mentioning over the last 3 calls with this one. The year basically behaved with a very strong Q1 or end of 2019. We saw the impact of the COVID-19 pandemic during Q2. Then we saw a stabilization towards the end of Q2. And then since Q3 and onwards, we continue to see increasing level of bookings, increasing demand, customers that maybe, at some point, were hesitant about restarting investments now that they see some light at the end of the tunnel in terms of the pandemic, and they can make sure they can size the impact of the pandemic. They realized that they can do all these investments and that they actually need to do them sooner rather than later. So what you're seeing is that situation where the travel sector still has been impacted and is being impacted, but all the other industries keep on showing strong momentum, strong bookings. And they want to make sure that they are ready once we get out of this, and that creates a lot of opportunity. So as Martin discussed at the beginning, it's coming from multiple industries. Very good momentum in health care. Very good momentum with financials, insurance payment companies. A very good momentum with anything related to e-commerce kind of retail. These companies that are getting ready to be able to engage 100% digitally with consumers. So we are seeing kind of a situation where a lot of demand is coming. We still need to see the recovery in travel, and keep in mind that travel was a big sector for us, right? So hopefully, at some point, that will become a tailwind for us. But that's basically, Maggie. It's a strong momentum, of course. Even though we are very optimistic, we also need to put some -- to be a little bit prudent as, again, some countries are more complicated than others. We don't know how fast the vaccine is going to be distributed and so on and so forth. -------------------------------------------------------------------------------- Patricia Pomies, Globant S.A. - Chief People Officer & Chief Delivery Officer [20] -------------------------------------------------------------------------------- Also to add there, Maggie, probably, I mean -- and Juan, I mean, I want to mention that also, I mean, on the gaming industry, I mean, we have been having a strong pipeline there and a strong relationship with our partners on the game sector. Also with media and entertainment, I mean. And so when those industries were ready to start playing, I mean, we were ready also because, as Martin mentioned before, we have been training our Globers with different kind of initiatives, like the Globant University, as we mentioned last quarter. I mean, that is -- that has -- those are the kind of initiatives that are really prepare our talent. So wherever the client needs us, we are ready to keep the demand on. -------------------------------------------------------------------------------- Amit Singh, Globant S.A. - Head of Finance & IR for U.S. [21] -------------------------------------------------------------------------------- The next question comes from the line of Surinder Thind from Jefferies. -------------------------------------------------------------------------------- Surinder Singh Thind, Jefferies LLC, Research Division - Equity Analyst [22] -------------------------------------------------------------------------------- So a 2-part question. One, just following up on the idea of just kind of global expansion in new locations for delivery centers and the idea of balancing that model of delivery centers versus work from home, can you talk a little bit about the decision to maybe set up office in certain countries from location? And is there a minimum level of scale that you're trying to anticipate there? Or is there the potential to truly change the delivery model in the sense that you can have a much, much more distributed workforce? Or do you still need to have, for every location, pick a number, 200 people in an office or something or some sort of headcount number in a given location? -------------------------------------------------------------------------------- Martín Migoya, Globant S.A. - Co-founder, Chairman, CEO & President [23] -------------------------------------------------------------------------------- I can take that one, and then Pato can complement maybe. Thank you, Suri, for the question. And the -- this new reality means that we are also rethinking the office space, and that means also that we won't have any more one seat per each of our Globers. Well, if they want, yes. But in general, we will work much more balanced between work from home and work from the office, so that means that gives us a lot of more flexibility. I mean, the new offices we are putting together are totally different from the past offices we are putting together. They have much more space for meetings. They have much more space for having lunch or dinner or meetings and be like a huge place to get together with people. And this is like the new reality. This is what's happening. So the message behind it is that it's allowing us, too, to start a much more global recruiting, which we are already doing, much more global recruiting. Now it is necessary that even if we are going global to recruit to many more places, those guys will be connected to some country or to some cities and specific city. And we will need to have some specific presence in those places where -- so we can gather with them, and we can get them together. So although this will happen, we'll keep on having the need of having a specific presence, but now with a totally different dynamics and metrics in terms of how much office space we need to open up a new city. Now we can open up a new city with a very small effort that before was a totally different game. So I think that answers your question regarding how you will scale up. Okay, now the scale-up looks much different than before, and I'm truly excited about this new reality because we were dreaming about this for many, many years. And now it looks like it's happening. -------------------------------------------------------------------------------- Surinder Singh Thind, Jefferies LLC, Research Division - Equity Analyst [24] -------------------------------------------------------------------------------- Got it. That's helpful. And then just a question about the guidance here. When I look the past couple of quarters, obviously, things have come in above expectations just based on, arguably, what's been a faster than expected improvement in the economy and stuff. But when I kind of look forward and I think about the guide that you've provided, it also sounded from some of the commentary that there's still some conservatism in the guide because you guys talked about lockdowns and COVID and stuff. How -- is there -- can you quantify the conservatism in this guide versus how maybe you've guided in the past when we warrant in this environment? -------------------------------------------------------------------------------- Juan Ignacio Urthiague, Globant S.A. - CFO & IR Officer [25] -------------------------------------------------------------------------------- Yes. I'll take that one, Martin, if you want to. Surinder, we always historically have been guiding based on what we -- where we feel very comfortable about meeting the numbers. This has been the history for the last -- since we're a public company, right, since 2014. Today, we are very comfortable with guiding Q1, very high confidence level, as always. But when we need to look into the rest of the year, I think that there is still macro uncertainty. There is still some countries where we are delivering services, where we are selling services that they still have some issues. Some of the industries that have grown a lot with Globant, like travel, it is still impacted, and it's not exactly clear when it's going to come back. So what we try to do is reinstate the full year, let's be prudent. And then as the year progresses and we see more light at the end of the tunnel, which clearly seems to be the case, right, we are optimistic about what's happening. We will update the guidance, but there is no point in taking unnecessary risks when the COVID is still around, right? 100%, all of us are now doing this call from home. And in some countries, the numbers are still very, very bad. So we feel that taking a prudent approach, being -- going step-by-step and reinstating the full year guidance is the right approach at this point. And we will update as the year progresses. -------------------------------------------------------------------------------- Amit Singh, Globant S.A. - Head of Finance & IR for U.S. [26] -------------------------------------------------------------------------------- Next question comes from the line of Diego Aragão from Goldman Sachs. -------------------------------------------------------------------------------- Diego M. Aragão, Goldman Sachs Group, Inc., Research Division - Equity Analyst [27] -------------------------------------------------------------------------------- Yes. So look, first, maybe just a follow-up question regarding the revenue outlook because I just want to make sure that I got the right messaging here. What's the revenue contribution by region that you want to take into consideration for your full year guidance for 2021, especially because I want to understand whether or not we should be considering FX as part of the growth equation here? -------------------------------------------------------------------------------- Juan Ignacio Urthiague, Globant S.A. - CFO & IR Officer [28] -------------------------------------------------------------------------------- No. Look, first thing is that we are seeing Latin America and Europe growing. You saw the last quarter, right, growing a little bit faster than the U.S., because the U.S. had a bigger share of the travel and hospitality sector. So depending on the recovery of travel and hospitality, we may have all the regions growing at a similar pace. If that's not the case, you would probably see more EMEA and Latin America growing faster. Now when you talk about FX for next year, right, actually, most of our revenue, about 86% of the revenue is denominated in U.S. dollars, so there is only a smaller share of that in currencies other than the dollar. And if what we are seeing from macro reports and all that is that the dollar might be a little bit weaker. So if anything, it might be positive for the revenue, the impact on the revenue side. But again, at this point, we prefer -- and we set all the targets for our teams in dollars, so we just focus on the dollar number. We don't pay the FX game. We need to deliver the dollars that we want to bring. -------------------------------------------------------------------------------- Amit Singh, Globant S.A. - Head of Finance & IR for U.S. [29] -------------------------------------------------------------------------------- Diego, You are muted, if you have a follow-up. -------------------------------------------------------------------------------- Diego M. Aragão, Goldman Sachs Group, Inc., Research Division - Equity Analyst [30] -------------------------------------------------------------------------------- Sorry, Amit. I was trying to unmute here. So sorry for that. So look, no, just -- it's just a second question, if I may, which is related to the number of clients. I mean, we can see that this number -- the number of clients coming down slightly year-on-year, which makes sense if we will take into consideration your strategy to increase the scope of projects within your existing clients, instead of growing significantly with the new clients, right? But that being said, I just want to understand what should we be considering going forward, especially to understand whether or not there is like the right balance between clients and existing clients. -------------------------------------------------------------------------------- Juan Ignacio Urthiague, Globant S.A. - CFO & IR Officer [31] -------------------------------------------------------------------------------- Yes, Thank you, Diego. I'll take that question. So it's much more important for you to focus on the number of accounts over $1 million, over $5 million as opposed to focusing on the total number of customers. Every time we do a deal, sometimes they come with some very, very small customers that over -- that maybe have a smaller potential and eventually, they don't grow that much. And we basically end up focusing on selling more to the high potential lows, right? We have the 100-Square strategy in place, which is the evolution of the 50-Square, so we want to focus on these very large global companies that are going to make Globant significantly larger in the future. So I think that, as opposed to looking at the total number, which is fine, if it goes down, we will be fine, it's still very high, right, 800 customers. But I would put a lot more emphasis on the above $1 million, above $5 million, and how we are performing in those sectors. -------------------------------------------------------------------------------- Amit Singh, Globant S.A. - Head of Finance & IR for U.S. [32] -------------------------------------------------------------------------------- Our next question comes from the line of Cesar Medina from Morgan Stanley. -------------------------------------------------------------------------------- Cesar Alejandro Medina, Morgan Stanley, Research Division - Equity Strategist [33] -------------------------------------------------------------------------------- Sorry for the delay. I was wondering if you can give us a comment regarding your -- the plans that you have for Bluecap and what type of client engagement could that bring to Europe. -------------------------------------------------------------------------------- Martín Migoya, Globant S.A. - Co-founder, Chairman, CEO & President [34] -------------------------------------------------------------------------------- Sure. Thank you, Cesar, for joining and thank you for the question. The know-how that Bluecap is bringing to the table is like a very deep knowledge of analytics and data analytics on the risk side. So basically, these guys are able to -- this team is able to provide predictions about the performance of the different types of assets that the banks have, the different types of clients and group of clients and cohorts of clients that the banks have and predictions on different types of productivity or the amount of money that they would lose with each of those profiles of customers. So that capability, that, of course, we will keep on using for new projects. And of course, those predictions and that data analytic needs to then connect with technology and with products that can putting access what these guys are able to predict. So the idea of getting together when we were talking with Maite and the whole team were the idea was, okay, let's do the analysis, let's do the data prediction that use artificial intelligence to understand what's going on inside those portfolios, and then let's develop the technology that will allow the banks and the financial service companies to be more efficient. Now this is the initial, I would say, like #1 step of doing things together. #2 step is to bring that same knowledge to many other sectors. The same thing happens in -- on cars. It happens when you're selling a car or it happens when you're selling flights or tickets or when you're selling any kind of online asset. So we plan to first -- in the first moment to keep on developing things together for the financial sector and then go to expand to other sectors to be able to develop these -- that same knowledge, that same ability to predict to other industries, which excites me a lot. So this is pretty much the rationale behind it. -------------------------------------------------------------------------------- Amit Singh, Globant S.A. - Head of Finance & IR for U.S. [35] -------------------------------------------------------------------------------- So the final question for today comes from the line of Steven Enders from KeyBanc. -------------------------------------------------------------------------------- Steven Lester Enders, KeyBanc Capital Markets Inc., Research Division - Associate [36] -------------------------------------------------------------------------------- Okay. Great. I guess, I just want to touch a little bit on how you're thinking about the expectations around your software investments and what you're doing with your augmented coding as well as the new chat solution. I guess, what is kind of the go-to-market look like with that and how you're thinking about monetizing that down the line? -------------------------------------------------------------------------------- Martín Migoya, Globant S.A. - Co-founder, Chairman, CEO & President [37] -------------------------------------------------------------------------------- Sure. The -- that investment for us is critical. I mean, we are being able to differentiate our offering when we are in front of the customers, and that's the first way to monetize that. When we sit down at the table and we say, okay, instead of doing the things the old way, we're doing the things in a new way. And this reinvention for me is extremely important when competing, as I said, every day in front of our customers and competing with our amazing competition we have. So that's one thing -- that's one way to monetize it that we're already doing it now. Now what happens if these guys want to use it for them or want to use it for other engineers that they have in the same project or other projects? We will be very happy to use it and to expand it, and we'll be charging some money for that independently on our services. And it will be a fee that will be connected with the -- a certain amount of money per month, per user that is using this platform. We will start trying that model during 2021 as the product evolves, as the product improves, and those are the 2 main ideas we have. We could have many more ideas and many more things that we are thinking, but I think those 2 are very clear, very easy to understand and really doable. Now let's see how it works. You never know. But the very beginning of the battle is being won because we are in front of customers being able to show something that nobody else has. -------------------------------------------------------------------------------- Amit Singh, Globant S.A. - Head of Finance & IR for U.S. [38] -------------------------------------------------------------------------------- Actually, we have request for one final question, so if it's okay with you. -------------------------------------------------------------------------------- Martín Migoya, Globant S.A. - Co-founder, Chairman, CEO & President [39] -------------------------------------------------------------------------------- Sure. Just go ahead. -------------------------------------------------------------------------------- Amit Singh, Globant S.A. - Head of Finance & IR for U.S. [40] -------------------------------------------------------------------------------- We'll go ahead then. Arturo Langa from Itaú. -------------------------------------------------------------------------------- Arturo Langa, Itaú Corretora de Valores S.A., Research Division - Research Analyst [41] -------------------------------------------------------------------------------- Just a really quick one. But in the past, you have stated that you had interest in payments in exploring that area. I'm just wondering where that stands and then if there has been any news on that -- on those initiatives. -------------------------------------------------------------------------------- Martín Migoya, Globant S.A. - Co-founder, Chairman, CEO & President [42] -------------------------------------------------------------------------------- Well, they are progressing well. We have some good progress in terms of implementing some of those payment systems in some -- with some -- together with some banks. And we have no news yet, no new developments on the -- yes, the product is progressing. Each day is better, but we have nothing new to be released right now. But I'm quite bullish on the future of that specific segment, and that's on the approach we are developing, and we are trying to push. Then we are developing a lot of things for many of our customers that is really exciting. And this is growing very, very fast. As you may imagine, digital payments are growing everywhere, so we are not outside that growth loop. So this is the update I can give you now. -------------------------------------------------------------------------------- Amit Singh, Globant S.A. - Head of Finance & IR for U.S. [43] -------------------------------------------------------------------------------- Thank you very much. So that will be all for the Q&A section today. Thank you all for joining. Thank you all to the analysts for asking intelligent, smart questions. I will now ask Martin to please provide the closing comments. Martin, please go ahead. -------------------------------------------------------------------------------- Martín Migoya, Globant S.A. - Co-founder, Chairman, CEO & President [44] -------------------------------------------------------------------------------- Thank you very much, Amit. Well, thank you very much, everyone, for joining, number 1. Number 2, I hope this new format is something that you like. We will try to keep on improving it and making it better each time. So thank you very much. And again, thank you very much for your coverage and support. Looking forward to see you in the next quarter. Bye-bye. -------------------------------------------------------------------------------- Amit Singh, Globant S.A. - Head of Finance & IR for U.S. [45] -------------------------------------------------------------------------------- All right. Thank you much.