Globant (GLOB) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $611.1 million, up 8.6% year-over-year in constant currency, but slightly below expectations due to macroeconomic and tariff headwinds.

• The business remains resilient with a robust pipeline, strong growth in new markets, and a focus on AI-driven opportunities and next-gen software expertise.

• Strategic focus includes deepening client relationships, expanding AI studios, and rolling out new subscription-based commercial models.

• Several high-profile deals and partnerships were closed, and the company is recognized as a leading IT brand with significant industry accolades.

• ESG leadership is demonstrated by a #6 ranking on Fortune's 2024 Change the World list for sustainability.

Financial highlights

• Q1 2025 revenue grew 7% year-over-year (8.6% in constant currency), with North America up 6%, Europe up 13.4%, new markets up 84.4%, and LATAM down 9%.

• Adjusted gross margin was 38%, and adjusted operating margin was 14.8%, both flat year-over-year; adjusted net income margin was 11.1%.

• Adjusted net income was $67.8 million, with adjusted diluted EPS of $1.50; IFRS diluted EPS was $0.68.

• Cash and equivalents plus short-term investments stood at $120.2 million; net debt was $167 million.

• Free cash flow consumption was $5.7 million, consistent with prior years.

Outlook and guidance

• Q2 2025 revenue guidance is at least $612 million (4.2% year-over-year growth); full-year 2025 revenue guidance is at least $2,464 million (2% year-over-year growth).

• Adjusted operating margin target is at least 15% for both Q2 and full year 2025.

• Adjusted diluted EPS forecast is at least $1.52 for Q2 and $6.10 for the full year.

• IFRS effective income tax rate expected at 20%-22% for Q2 and full year.

• Positioned to capitalize on generative AI trends and digital transformation imperatives.