Globant S.A. (NYSE:GLOB) Q4 2023 Earnings Call Transcript
Globant S.A. (NYSE:GLOB) Q4 2023 Earnings Call Transcript February 16, 2024
Globant S.A. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Arturo Langa: Good day, and welcome to Globant's Four Quarter 2023 Earnings Conference Call. I am Arturo Langa, Head of Investor Relations at Globant. [Operator Instructions] Please note this event is being recorded and stream 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 Martin Migoya, Co-Founder and Chief Executive Officer; Juan Urthiague, Chief Financial Officer; Patricia Pomies, Chief Operating Officer; and Diego Tartara, Chief Technology 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 risk 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 now like to turn the call over to Martin Migoya, our CEO.
Martin Migoya: Good afternoon, everyone. I'm happy to be here to report our earnings results from Q4 and the full year of 2023. As we mark our first 20 years, we are very proud of what we have accomplished as a company. First, our quarter's results. In Q4 2023, Globant made $580.7 million in revenue, representing an 18.3% increase year-over-year and 6.5% quarter-over-quarter. We continue to demonstrate our ability to grow profitability, to generate cash, and to manage our robust balance sheet. Total revenue for 2023 was a record $2.1 billion. This was above our guidance and represents 17.7% year-over-year growth. Last year, we entered over 10 new markets, each with exciting growth opportunities for both our clients and delivery networks.
We also began exciting relationships with more than 250 new clients. We keep expanding and diversifying our service offering. The Globant concept means the simplicity of having a trusted end-to-end partner, one that can craft multiple solutions with a larger breadth of services, platforms, and capabilities. Over the past year, we have launched seven new studios in line with the expanding needs of the market. I am encouraged to see that Globant’s global recognition continues to spread. Brand Finance has recently named Globant as the world's fastest growing IT brand and the fifth strongest IT brand globally. The future growth of our total addressable market remains promising. After an uncertain 2023 for IT spending, Gartner estimates momentum to return in 2024 with 6.8% expected growth globally.
From cloud migration to data management strategy, digital branding projects to AI initiatives, companies are resuming investments to stay ahead of the innovation curve. We see this change reflected in our pipeline. Clients are requesting a wider scope of transformation projects that require more sophisticated and dynamic solutions. As we close 2023, we saw a higher demand for projects with AI components. The AI-related business is outpacing the total growth of our service offering. According to Forrester, generative AI will have a 36% CAGR through 2030 to finally capture 55% of the AI software market. Gartner estimates that by 2027, 90% of service providers will use generative AI for software development services, including code compiling and optimization, automated debugging, and automated quality assurance testing.
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