Globant S.A. (NYSE:GLOB) Q2 2023 Earnings Call Transcript

Moshe Katri: Hey, thanks. Really impressive numbers guys, congrats. I have two follow-up questions here. First, you indicated that booking growth for the first half of the year compared to the second half of last year was up 40%. Is there any way to kind of gauge how that — how that — how bookings were on a quarterly basis Q1 versus Q2, i.e, have we seen bookings accelerate from Q1 to Q2 in terms of growth rate? And then in that context, maybe some color on where you’re seeing some of that booking growth coming through in terms of maybe regions and verticals? That’s my first.

Juan Urthiague: Sure. I’ll take it. Thank you, Moshe, for the question. So, I think what is important there is that we have started to build backlog again, right. If you remember back when we guided — when we reported Q1, we were saying, in the second half of last year, we had consumed a big part of the backlog, so we need more bookings, we need more deals to start building backlog again. So, this 40% increase in bookings in the first part of the year relative to the year before, shows that because of all these deals that we have been able to close, the backlog has started to pick up again, which to grow, you need both things, right, you need flow and you need stock. So, having the — having or starting to build backlog again helps.

When we look at Q1 and Q2 and what is already part of Q3, I think that we have seen kind of a steady, slow but steady improvement in every month and that continues. We have not seen any changes. I mean, of course, we are not in the 2021 levels or second part of 2020, but definitely, when you look at — you start — if you were to draw a line starting in July 2022 all the way to August 2023, you could definitely see how there was a big change towards the end of the year and sequential increases pretty much in every month. Which industries or which regions, I think the good news is that the US has woken up again. We started — we started to see now a lot of those deals that were getting delayed now closing. Europe has hold-up well during the whole process.

I mean it never really went down that much. It never really went — was impacted that much. And LatAm is — was always also kind of stable. So, I would say that the main changes in the US being a little bit more active and that’s what has been driving big part of that increase in bookings, Moshe.

Moshe Katri: Okay, that’s really helpful. And then, if I’m looking at some of the trends during the quarter, we’ve seen growth moderate in North America and Latin America on a year-over-year basis versus last quarter. We’ve seen a nice pickup in Europe. Sorry, we’ve seen — yeah, we’ve seen a nice pickup in Europe and APAC. Should we see some of that reversing or maybe should we see improvements in North America and Latin America in terms of growth rates in the second half based on the bookings that you’re talking about?

Juan Urthiague: Yeah. And Europe will be a little bit lower. Keep in mind that Q3 is typically the holiday season in Europe. So, it tends to be softer than on this — on a sequential basis, you are going to see North America and Latin America, and new markets also picking up and probably Europe is going to be softer in terms of sequential growth going into the second half.