Globant's Q4 In Line With Expectations
Globant (NYSE:GLOB), a leader in IT and software services, released its fourth-quarter earnings on Feb. 20. The Luxembourg-based company's non-IFRS adjusted diluted EPS of $1.75 marginally exceeded analysts' expectations of $1.74. However, revenue of $642.5 million compared to analysts' projections of $644 million was a narrow 0.2% miss.
| Metric | Q4 2024 | Q4 2024 Analysts' Estimate | Q4 2023 | % Change |
|---|---|---|---|---|
| Non-IFRS adjusted diluted EPS | $1.75 | $1.74 | $1.62 | 8.0% |
| Revenue | $642.5 million | $644.0 million | $580.7 million | 10.6% |
| Non-IFRS adjusted gross profit margin | 38.3% | N/A | 38.0% | 30 basis points |
| Non-IFRS adjusted profit from operations margin | 15.7% | N/A | 15.3% | 40 basis points |
Source: Analysts' estimates provided by FactSet. IFRS = International Financial Reporting Standards (a set of accounting rules used globally to keep corporate accounting consistent. A rival system to Generally Accepted Accounting Principles, aka GAAP.)
Understanding Globant's Business
Globant operates in the technology and services sector, specializing in digital and cognitive transformations. It offers a wide range of services, including cloud transformation and AI innovation, to clients across industries such as fintech and healthcare. Recently, Globant has focused on diversifying its service offerings to reduce market-specific risks. Its strategy has included expansions into new markets and the introduction of solutions in areas such as blockchain technology.
Globant's success rests on offering a diverse portfolio and maintaining innovation, with a strategic emphasis on AI and cloud services. These facets will be key to its future growth.
Quarter's Summary
In the fourth quarter, earnings rose by 8% year over year to $1.75 per share, while revenue increased by 10.6% to $642.5 million -- near the lower end of management's guidance range of $642 million to $648 million.
Operationally, Globant's non-IFRS adjusted profit from operations margin of 15.7% was within the expected range and above the prior-year period's 15.3%. In addition, non-IFRS gross profit margin saw modest year-over-year growth from 38.0% to 38.3%.
With 64.8% of its revenue in U.S. dollars, foreign exchange rate fluctuations have pressured Globant's profits. Additionally, competition in the tech space continues to rise, necessitating ongoing investments in R&D to remain competitive.
2025 Outlook
Management anticipates continued growth this year. It projects revenues of between $2.635 billion and $2.705 billion, reflecting a robust growth outlook of 9.1% to 12%. Management also set a target for steady non-IFRS adjusted profit margins. Notably, anticipated foreign exchange impacts are expected to reduce revenue growth by approximately 1.5 percentage points.
For investors, key areas to monitor will include the growth of AI services and Globant's continued geographical expansions.
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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends Globant. The Motley Fool has a disclosure policy.
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