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.

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.

Globant has been significantly investing to take advantage of the estimated $450 billion opportunity we see in AI services. Since the consolidation of our AI studio, we have built up capabilities in the space that are ready to apply now that AI is going truly mainstream and with IT service companies as the proxies for adoption.

Globant has completed over 500 AI-centric projects in nearly every field of AI, including predictive analytics, natural language programming, computer vision, and custom-made neural networks, among others. In generative AI, we have been leveraging many of the large language models since 2017 in internal applications, powering efforts behind code enhancement, feedback, and testing tools.

This has given us a lot of support a head start in developing and deploying GenAI. One example is our work with the Latin American e-commerce powerhouse of Mercado Libre.

We are leveraging generative AI and machine learning for provider assistance, fraud and anomaly detection and generation of financial reports. We are particularly excited about this project due to the impact it can have on the Mercado Libre ecosystem, which includes fintech, logistics, digital marketing and more.

We also see a great opportunity to take advantage of the heightened appeal we see in spatial computing. This technology is blurring the line between the physical and digital experience.

Similar to the iPhone moment that GenAI had last year, spatial computing is gaining traction as new and exciting products, such as the Apple Vision Pro, are becoming widely available. This presents a timely opportunity for us because we have been working in the space since 2022, when we began our work with Magic Leap.

We drew on the expertise from several of our studios to partner with them to develop their Magic Leap 2 headset. Currently, GeneXus teams are developing an accelerator specifically designed for visionOS, the operating system of the Vision Pro.

The accelerator will help create applications that inherently understand and adhere to the design and experience paradigms of visionOS. We will be offering a beta version to clients next month.

As Globant has been able to deliver early on in the generative AI space, we are confident in our ability for a similar execution as the spatial computing sector grows. I am confident that Globant boasts one of the more sophisticated and proficient teams in the world to make this adoption happen.

As a company, there are several growth drivers that will move us forward. First, our global footprint.

Every year, Globant is more diverse. We are now present in a total of 33 countries.

No one country contains more than 20% of our workforce. This enables us with the adaptability to scale our projects as quickly as is required, regardless of time zone, culture or logistics among our global delivery network.

Our prominence in Latin America, our home region, is particularly beneficial right now, as more of the biggest companies choose this region due to its proximity, multilingualism and adaptability. In the past months, we have made significant investments in Mexico and Brazil, the two largest economies and responsible for 38% of Globant's revenue in the region, because we are eager to take up this demand.

In Mexico over the past year, we have established a new team specifically dedicated to life sciences to address the fundamental changes and growth of the sector in the region. In Brazil, we have almost doubled our team over the past year, betting high on keeping our leadership in enterprise applications, especially salesforce, and reinforcing the economy digital transformation projects with the acquisition of Iteris.

We are optimistic about our future expansion this year as we see a robust business pipeline and organizations IT expenditures recovering compared to last year. Regarding our studios, the consolidation into our four studio networks is fostering ecosystems of ideas and expertise among our specialized business units.

Cross-pollination between studios is strengthening the 360 natures of our solutions as well as creating a pathway to cross-selling. Beyond showcasing the amazing portfolio of services Globant offers, it mirrors our vision for the industry moving forward.

For example, the most recent acquisition of GUT that Diego and myself will expand on later is a step of our drive to reinvent the creative marketing industry through technology. Through areas such as our enterprise studio network, which has experienced a 4x increase in the past four years, we can serve clients regardless of their enterprise software of choice.

Being cloud agnostic and vendor agnostic enables us to scale our adaptable solutions to each client. We see increasing growth interest in the sports and entertainment industry as the sector reinvents itself.

Streaming is quickly becoming the number one way to view live and sports. Additionally, companies will need to rely on zero and first party data to maintain loyalty as fan engagement this year will likely become cookie less.

Globant has proven expertise in both areas as well as in creating comprehensive fan experiences from working with FIFA on their FIFA Plus platform to helping top sports teams understand their fan behavior. We focused our expertise and growth in this space through our joint venture with LaLiga last year known as Sportian.

By leveraging technology, data, experience design and business strategy, we are able to create new experiences emotionally connect with fans around the world and create tangible value for fans, players, sponsors and sports organizations in a sustainable way. We have recently established the Sportian Advisory Board.

The first members include Manu Ginobili, NBA All Star and George Gregan, Australian rugby captain and World Cup winner. We look forward to working with them to make our mark together on this fascinating and rapidly growing industry.

In addition to our organic growth, Q4 saw the incorporation of exciting new members to the Globant family, including Gut in the United States and Iteris in Brazil. Announced in late November, Gut brings a fire of creativity to Globant.

They were recognized as the 2023 Cannes LIONS Independent Network of the Year and Adweek's Breakthrough Agency of the Year. They work with over 60 clients globally, including AB InBev, Kraft Heinz, Coca-Cola and Mercado Libre.

Technology and creativity have never been more closely linked than they are today. We always say that Globant is where innovation, design and engineering meet scale.

And we couldn't be more excited to bring the world's most creative global network into the mix. We are also thrilled to support Gut's global expansion and to keep Gut's leadership team in place with a continued focus on building culture and driving growth.

Both companies will now work together to identify valuable cross -selling opportunities. The acquisition of Iteris, a Brazilian business and technology consultancy specializing in digital transformation, is a doubling down on our commitment to Latin America's largest economy.

They have over 600 experts in industries, including payments and banking, manufacturing, communications, education, retail and healthcare. We keep expanding our connections with our community as well.

With record attendance, we had our annual Converge event bringing together fascinating and influential thinkers who are on the cutting edge of technology. I enjoyed my own conversations with Marc Benioff from Salesforce and [inaudible] from New Bank on the future of technology and what it means to transform industries.

You can check them out as well as the multitude of content at converge.globant.com. On a personal note as I close out, it was an emotional moment for us to commemorate our 20th anniversary at the New York Stock Exchange on December 4.

Seeing this company grow from my three co-founders and I in a bar to a global team of more than 29, 000 creative minds has been fantastic. However, I genuinely believe that we are just scratching the surface of what we can do.

Company-wide entrepreneurship, creativity and resilience will push us forward over the next 20 years. With that, I will hand it over to Diego Tartara, our CTO.

Thank you very much.

Thanks Martin and hello everyone. I'd like to begin with two major technology trends that present interesting growth opportunities for Globant.

First, there's a growing synergy between the digital and physical worlds through AI-powered wearables. Products from companies like Rabbit, Humane, Ray-Ban, Meta and Apple enhance decision making for users and foster a more human-centric experience.

Many of these products, such as the ML2, R1 or the Vision Pro, may revolutionize how we interact with technology in an intuitive way. Second, the integration of virtual and augmented reality into the digital experience.

We see this trend gaining momentum through innovations like Disney's Holo Tile Floor. This technology enhances collective digital interaction for a more immersive experience, applicable to the metaverse, live-action shows and many other instances.

Organizations that want to leverage the best of both trends will rely heavily on AI and machine learning. This is where Globant's expertise comes into play to actively collaborate.

We see a shift from isolated proofs-of-concept to full integration with experiences and processes. We have shared our vision of the AI market in our recently published Tech Trends report, which also expands on our perspectives on other disruptive trends, including quantum computing, robotics, blockchain and immersive experiences.

I encourage you to check it out at reports.globant.com. We continue to position our studio networks to expand and diversify our value offering.

The incorporation of Gut into the Globant family means a major growth step in our Create Studio network. As Martin mentioned, our ability to offer current and future clients new ways of engaging and surprising users will be impacted big time.

Also within this network, we have created a new studio to focus on customer loyalty. According to Forrester, over 50% of leading companies plan to increase their current investments in customer loyalty programs in the next two years.

Globant's new loyalty studio brings together our related experience in aviation, retail, and sports, among other sectors, as well as strong expertise across payment systems, digital wallets, digital currencies, blockchain, AI, and more. A recent prime example of our expertise has been our work with the LA Clippers.

This program represents a non-traditional initiative designed to incentivize specific fan behaviors both at home and in the venue. Its goal is to consistently enhance motivation, energy, and engagement through a reward system.

The loyalty engine seamlessly connects with the fan identity, multiple IoT devices to measure fan activity, and ticketing systems, among others. Our team collaborates on shaping the program strategy, integrating the loyalty engine into the platform, and developing the user interfaces for fans and staff, along with multiple use cases.

Our Reinvention Studio network, focused on transforming not only clients' businesses, but also the industries themselves, has consolidated the new connected experiences studio. With today's multiple touchpoints for interactions between organizations and their customers, companies need to craft unique and meaningful experiences to boost revenue.

According to Forrester, solid investments in customer experience can yield a 700% return over 12 years. With this new studio, Globant brings to the table its expertise from initiatives such as the technology-integrated experience at the Intuit Dome, the customer journey we designed for Royal Caribbean, and the digital pre-buying experience we developed for Nissan.

As an end-to-end partner, Globant can make a profound difference in how brands engage with their customers throughout their entire journey. Also within the Reinvention Studio Network, we have made exciting new strides in the health and life sciences sector.

Globant is finalizing agreements with three major pharmaceutical companies as their strategic partner in contract marketing and medical organization. The final product means combining the strengths of multiple digital studios, Globant X platforms, and enterprise tools from Salesforce.

The end-to-end solution includes three main steps, digital insights, customized and omnichannel strategy development, and finally a dedicated team improving brand awareness and patient outcomes through effective communication and services. All projects are long term, five years or more, positioning Globant as an industry leader in this competitive space.

We are also working with one of the largest U.S. health care companies.

They came to us because they were looking for a solution to detect events from camera images inside their hospitals so that they could make decisions more quickly and efficiently. Globant is applying AI to process images captured from cameras in real time.

We generated synthetic data to train and test the detection and classification models. Before this project, this was carried out through the use of real data, which is a longer and more costly process.

The project is being executed by combining the knowledge and efforts of our gaming, data, and healthcare, and life sciences studios, and our delivery networks in India and the US. Globant's enterprise studio network continues to expand.

Our unique position to address this market stems from years of developing our own capabilities, acquiring companies with enterprise application skills, and building strong alliances with global leaders such as Salesforce, SAP, Oracle, and ServiceNow. Globant has remained cloud agnostic and not industry siloed, making our solutions fully customizable and adaptable to every client.

As an example, we are leveraging our Salesforce multi-cloud capabilities in our work with the Intercontinental Hotels Group. Together, we created a streamlined action plan with field and operation support users.

The objective is to improve hotel performance through better tracking of engagements and actions. Through the work, we're delivering actionable insight to the IHG teams from over 10, 000 data points.

In our Oracle studio specifically, we were called upon by Oracle to establish a joint program to help their clients design and execute an AI enterprise innovation roadmap. The project catered to each client's business goals and even opened the possibility to work with the clients to rethink their businesses considering new AI paradigms.

To execute, we combined Oracle AI platforms, including generative AI services, machine learning, and Oracle Cloud infrastructure for AI workloads with our GlobantX AI platforms. Oracle clients also can now use selected GlobantX solutions to empower their enterprise applications as we are currently publishing them in the Oracle Marketplace.

Our unique digital studio network, which harnesses disruptive technologies including data and AI, blockchain, Internet of Things, quality engineering and much more, has been named a leader by IDC MarketScape in their Worldwide Software Engineering Services 2023 vendor assessment. This acknowledgement is a nod to Globant’s engineering talent and its ability to drive high ROI for our clients and clear roadmaps to reduce business and technology costs.

Now let me share some updates on GeneXus Enterprise AI, the platform that is revolutionizing how we and our clients approach corporate challenges. With this technology, we are developing a groundbreaking AI-based drilling assistant for Tech Petrol in the Latin American energy sector.

This solution provides real-time data analysis. transforming drilling operations management, enhancing efficiency, and enabling precise real-time decision-making.

At our GX30 event last quarter, we emphasized the incredible possibilities of generative AI to our global community. The entire GeneXus partner and development ecosystem is now fully aware of GeneXus Enterprise AI, and this is broadening our channel of sales as more organizations are directly exposed to the product.

Thank you for your attention. I'll now pass it over to Patricia Pomies, our Chief Operating Officer.

Thanks Diego, and hello, everyone. Since our inception, Globant's operational fundamentals anchored in a strong culture, engaged teams, and a unique delivery model have been pivotal in enabling growth, driving innovation, and delivering disruptive solutions to our clients.

Now these pillars stand reinforced, ready to catalyze further expansion and boost our business moving forward. Our current global footprint is diverse and well-balanced across key dimensions.

With our presence in 33 countries and several industry revenue streams, we are strategically positioned to capitalize on opportunities and navigate market fluctuations with resilience. Furthermore, we have recently enhanced our Agile Pod methodology, achieving a significant milestone by certifying almost 100% of our pods in AI.

By leveraging AI through our specialized suite of products, we have augmented our analytical prowess and accelerated decision-making, granting us a clear competitive advantage. In conjunction, we have redesigned our people and staff areas to better support our pods, enhancing our agility, and enriching the quality and creativity of our solutions to increase responsiveness to client needs.

Let me share some key figures regarding our clients. Our 100 squared remains the compass for strengthening the relationships with our clients and offering more services as we grow our collaboration over time.

To complement it, we have recently revamped our global account model so that we can scale up our partnerships with organizations that span multiple geographies, all while harnessing the talents of multiple studio networks. We currently have 16 clients bringing in more than $20 million in annual revenue and we now have 311 clients that provide more than $1 million of annual revenue, 20.1% more than one year ago.

Revenue from our largest client, the Walt Disney Company, remained the same quarter-over-quarter. The rest of our accounts collectively grew quarter-over-quarter by 7.1% and 21.9% year-over-year, reflecting the increasing diversity of our prime revenue sources.

In Q4, 57.4% of our revenue came from North America, 22.9% came from Latin America, 17.2% from EMEA and 2.5% from APAC. When assessing business verticals, no vertical accounts for more than 22% of total revenue.

We proudly work across multiple sectors, ensuring a robust and balanced business model. Now to our headcount.

As of December 31st, we were 29, 150 Globers of which 93% are IT professionals, representing an addition of 1, 541 IT professionals on a sequential basis. Today, Colombia, our largest delivery hub, represents 20% of our global workforce, while the broader Latin region accounts for 70% of Globers and India 15%.

We are excited to welcome new Globers from Netherlands after the acquisition of Gut. Also, to amplify our position in Europe, we opened our first innovation hub in Berlin.

Our attrition rate over the past 12 months is 8.1%, a record low, 1.4 percentage points lower quarter-over-quarter, and 8.6 percentage points lower year-over-year. As of Q4, our utilization rate stood at 80.2%, and as previously conveyed to the market, we continue to have positive net additions on an organic basis, which is a reflection of the demand we see.

To foster a thriving culture that cultivates talent and consistently provides the best experience for our teams, active listening is essential. We are happy to share that we concluded Q4 with a solid uptick in the Engagement Index, tracking pride, sense of belonging, likelihood to recommend, and desire to remain at Globant, of 2 percentage points from our previous pulse check, reaching a truly positive overall score of 84%.

As Globant continues to become a more global and diverse company, our culture must evolve as well. Recognizing the need for entrepreneurship relationship building throughout our organization, we decided to add three new values to our corporate culture.

Own the place inspires the entrepreneurial spirit and trust powered by autonomy while encouraging every Glober to be proactive, passionate, and committed to growing the company. Cross-selling hero aims to foster synergy.

It encourages different teams to collaborate across our services, platforms, and studio networks. With this cross-selling mindset, we build bridges and amplify the impact of our solutions.

Finally, AI hero reflects the importance of AI at our company to everything we do and celebrates those that excel at applying and improving our AI capabilities both in-house and for our clients. I'd like to share a quick update on how we are leveraging AI internally.

The platforms of Gino and Sensei presented to you on last quarter's earnings call have demonstrated substantial growth. Gino, our AI human capital partner, which helps managers build teams in a conversational way, has already supported 16, 000 initiatives, 91% of which resulted successful.

Sensei, our AI assistant for tailored professional skill development, completed more than 2, 300 assessments in Q4 alone. Sensei has had a profound effect on how we skill up at Globant, with the average learning hours having increased by 40% year-over-year.

And finally, some updates on our Be Kind initiative. Our Be Kind to yourself holistic strategy showed great results.

Over 79% of Globers expressed that they feel well physically, mentally, and spiritually when working, showing an increase of 3 percentage points compared to our last pulse. This quarter, we were recognized on the Financial Times, Statista Diversity Leaders ranking as one of the most diverse organizations across all industries and sectors.

We continue to share our Be Kind to the planet voice and sustainability best practices on the global stage. We participated at COP28, taking part in multiple discussion on innovation around carbon and biodiversity credits, Energy Transitions, Water Management, and Climate.

In all of these critical areas, Globant has a technology offering and a charted way for business to be both successful and beneficial to our planet. We're also proud to be working with the US Green Building Council, best known for their LEED certification product.

Through our strategic multi-program partnership, we are developing a new platform for the USGBC that will simplify the Green Building Certification process for large construction projects. Through this new interactive platform, property managers and owners will be able to seamlessly and interactively assess and manage sustainability criteria regarding energy, water, air quality, and waste, among other factors.

We are optimistic about the impact of our work, led by our sustainable business studio, as buildings are responsible for 30% to 40% of the global carbon footprint. Finally, we keep working to get more people involved with the tech industry.

In line with our commitment to provide coding scholarships to 15, 000 individuals worldwide by 2025, we have already awarded a total of 11, 500 scholarships, over 4, 000 during 2023 alone. Now, let me introduce Juan, our CFO.

See you all in some minutes for the live Q&A. Thank you.

Thank you and good afternoon, everyone. It's always a pleasure to reconnect and reflect on last year's performance.

In 2023, we've achieved results that stand as evidence of our resilience, innovation, the dedication of all our Globers, and trust of our clients. 2023 has been a year of dynamic growth and strategic execution.

Our full year revenues reached a milestone of $2, 096 million, a remarkable 17.7% year-over-year growth. In a challenging year, we went on the offensive and our bets paid off, reflecting our company's hunger for more, our focus on execution, and our commitment and passion for what we do.

In 2023, we've not only grown our top line but also captured significant market share, which stands as a clear endorsement of our value proposition. We are optimistic about the future of the company.

Our pipeline is strong and we see a positive change of tone regarding discussions of our client's long-term strategies relative to the start of last year. We still have plenty of room to grow with many of our clients, and as we scale, we seek to add more and more companies who wish to have the Globant experience.

Let's now review our solid Q4 and 2023 results. We are very proud of the positive top line growth we were able to deliver.

2023 revenues were up 17.7% year-over-year. This strong growth was mainly driven by an industry-leading 11% organic growth for the year.

Also, we delivered another strong quarter of profitability, solid cash generation, and a strong balance sheet position. These results were driven by our strong execution across all of our growth pillars.

In the fourth quarter, we've seen our revenues reach $580.7 million, a remarkable 18.3% year-over-year growth, which markedly outstrips industry averages and speaks to our strategic initiatives paying dividends. These results demonstrate our ability to navigate through headwinds with agility and capitalize on our diversified offerings and global reach.

Our organic growth remains a core strength, contributing 11 points to our overall expansion for the quarter, signaling the effectiveness of our 100 squared strategy and our commitment to deepening relationships with existing clients while forging new ones. The performance across our verticals reflects our solid execution.

We saw year-on-year and quarter-over-quarter growth across virtually all of our business segments in 2023 and in Q4 respectively. In a similar fashion, all of our key geographies performed strongly in Q4, witnessing a strong recovery when compared to the first half of 2023.

Media and entertainment energized by digital consumption trends at our biggest client and our efforts in the sports and entertainment segment saw a positive quarterly revenue expansion. Travel and hospitality grew strongly relative to Q3, supported by innovative partnerships and a resurgence in global mobility.

Consumer, retail, and manufacturing also showed strong sequential growth as companies continue to invest in their digital transformation efforts in the space. Technology, after a period of moderation, has stabilized, reflecting the essential nature of our services in an increasingly digital world.

We continue to be laser focused on profitability. We closed 2023 and the fourth quarter with an adjusted gross profit margin of 38.1% and 38% respectively.

For the full year, despite a tough pricing environment, currency fluctuations, and macroeconomic shifts, we've managed to maintain an adjusted operating margin of 15.2% staying within guidance. Similarly for Q4, our adjusted operating margin stood at 15.3%, also within our guidance.

This demonstrates our focus on operational efficiency and our ability to leverage revenue growth into meaningful profitability. Adjusted SG&A as a percent of sales stood at 17.8% in the full year 2023, versus 18.5% in 2022, representing 70 basis points of improvement.

Our adjusted net income in Q4 reached $71.1 million within 12.2% adjusted net income margin, up 30 basis points quarter-over-quarter. Adjusted diluted EPS for the quarter was $1.62, $0.02 above our guidance, representing a 15.7% year-over-year increase, based on 44 million average diluted shares.

Adjusted EPS for the year stood at $5.74, above our full year guidance, growing 13% versus 2022, and representing an adjusted net profit margin of 11.9%. We continue to believe that the long-term health of the company rests on growing while producing profits and we remain committed to this.

Our balance sheet remains strong. We've strategically managed our net cash position, ending the year with $323.3 million in cash and short-term investments.

As of December 31st, 2023, we had a total amount of $155 million drawn from our credit facility to finance some of the acquisitions done during the year. Our proactive approach to capital management has yielded a significant free cash flow of $192 million in 2023, compared to a cash generation of $102.1 million in 2022, reflecting our team's priority on sound capital management, liquidity, and financial discipline.

Our free cash flow to adjusted net income conversion ratio stands as of 2023 at 76.8% and 121.1% on an IFRS basis. This strong cash generation provides the company with solid funding to focus on growth, reinforce our strategic investments and reinforce our liquidity and net cash position.

We remain committed to driving strong free cash flow generation. Turning to the future outlook, we remain cautiously optimistic for 2024.

For Q1 2024, we project at least a 20.7% year-over-year growth in revenue, with a total top line of at least $570 million. For the first quarter of 2024, we expect our adjusted operating income margin in the 15%-16% range.

IFRS effective income tax rate is expected to be in the 22% to 24% range. As discussed in prior call, Pillar 2, which implies a minimum level of taxation at 15% rate for all jurisdiction, has been approved in Luxembourg starting January 1st, 2024, increasing our overall tax rate.

Our adjusted EPS for Q1 is expected to be at least $1.53, assuming 44.1 million average diluted shares outstanding for the quarter. Now let's move toward the full year guidance.

We continue to be very confident about delivering another year of industry leading growth. Our outlook considers a demand environment that while showing signs of a recovery relative to 2023, is still below a normalized level of demand.

Based on current visibility, we are providing our full year 2024 guidance of at least $2 billion and $435 million, or 16.2% year-over-year growth. This guidance figure considers a neutral FX outlook.

This outlook embeds a certain level of conservatism but one that we feel is prudent considering the still fluid macro and industry conditions. For the full year, we expect our adjusted operating margin in the 15% to 16% range.

2024 IFRS effective income tax rate is expected to be in the 22% to 24% range. Finally, our adjusted diluted EPS for 2024 is expected to be at least $6.50, assuming 44.3 million average diluted shares for the year.

As we conclude, I want to express my gratitude for the trust placed in us by our clients, shareholders and the entire global team. The past year has been a powerful reminder of the strength inherent in our culture, the agility of our business model and the transformative impact of our work.

Thank you everyone for joining the call today and for your continued support and belief in our vision and strategy. We look forward to updating you on our progress throughout the coming year.

Thank you, Juan. And hi, everyone.

So as we go through the question and answer section of this call, I will announce your name. At that point, please unmute your line and ask your questions.

Please meet your line after your question is done. I would also ask to please limit your time to one question only, please.

So thank you very much. And with that in mind, the first question comes from Tien-Tsin Huang from JPMorgan.

Thanks. Good to see you all.

Maybe I'll start and ask just some of the guidance, of course, on fiscal ‘24, especially Q1, thinking about the sequential decline. I know there's a lot of complexity with FX and M&A, but can you just comment on visibility and what we should consider for the first quarter in sequential growth for the rest of the year here versus history?

Maybe we'll start with that.

Thank you, Tien-Tsin. So for the first quarter, we guided $570 million, which is around 20.7% year-over-year growth.

That is a 1.8% sequential decrease. That decrease, when we reported back in November, we spoke about some one-off that we had Q4 related to licenses.

And then there was another impact that we got, which was the significant depreciation of the Argentinian economy and that resulted in renegotiation of contracts with some of our customers. So when we combine those two events, we ended up with a slight sequential decrease heading into Q1.

Going forward after Q1, basically, we are seeing sequential growth of around 45% every quarter and that lead us to around 16.2% year-over-year growth, which is, we believe, a very strong growth for the year.

Okay, now that's clear. Thanks for going through that.

And then maybe my follow-up, I'll ask an AI question, if that's okay. I know you mentioned 500 projects around AI.

So can you comment just on average deal size, how tight is that, or disperses that, or spread out is that? I'm just curious what the deal projects look like and if it drives any pull through for other larger projects at this point.

I'll take the first part and then we'll let Diego. Hi, Tien-Tsin, how are you?

So in the space, we are seeing like, I mean, it's what everybody's talking about. And that's pretty clear.

It has been pretty clear for the last quarters. Still, I believe the projects are exploratory.

And we are seeing some evolution in them. And we are seeing some evolution on the demand.

I think during this year at some point, we will see those large digital transformation like projects on the AI space coming. For now, companies are exploring how to use it.

But I would divide it, the thing and adoption of AI into specific portions. One is how people adopted to create content on any kind of any kind.

How to program faster, how to write code faster, how to write text faster. Everybody's using AI for that and generative AI for that, which is ideal.

And of course, companies are already leveraging those things. And then the big discussion is how we start using that on the internal processes to optimize what we do inside the companies.

And that's something that we are managing at every single pot level in which an AI champion is taking care of all the AI initiatives for 100% of the projects we do for our customers. Now, I would turn it over to Diego to comment on the size of the project.

So once [inaudible] which is, I think, pretty interesting.

So I think, Tien-Tsin, the most important thing is how this behaves. What we are seeing and what we are tracking is the penetration of AI into our clients and into our projects.

That a project has an AI component does not mean that it's an AI project. It's a business project.

It's solving a that typically before was being sold by other means, now with the use of AI. That is expanding dramatically.

And it's exactly how we see it from day one. This will be everywhere.

This is not like a niche for some specific type of projects. With regards to that, the growth of the AI studio is definitely by far outpacing that of the company.

We are seeing, we continue to see a lot of those projects being advocated to, as of today, to productivity. Doing what we used to do in some way, more effectively, much faster, cheaper, with the use of AI automation, content generation.

But we're seeing two different trends. The first one is we're seeing, to see a slight increase of the type of projects that have to do with consumer facing products being impacted by some AI components.

Content, just having suggestion engines, chatbots that help aiding the user, automatic generation of certain type of content for the user. The second thing we are seeing as a change is that the type of projects we're now doing, even when it comes to the space of productivity, are becoming more complex.

And this is actually very good. We are trying to solve deeper complex problems.

Now the data problems, we are feeding the same type of things, but from a much more complex ecosystem. And that becomes a data problem, which is part of the solution.

The models are much more complex. We're working afterwards with ML Ops to improve that over time.

So we are seeing those type of projects maturing. So I think it's a continuation of what we've been telling you since last year.

This will eventually take some time, but what we see is that within this year, we will definitely see the switch into the AI being used for new business likes, like having new revenue streams, new type of interfaces, consumer facing applications, et cetera.

The next question is coming from the line of Ashwin Shirvaikar from Citi.

Good to see you all. Hi.

If I can go back to sort of the previous question, because you mentioned obviously the one-time license, you mentioned the impact of Argentina devaluation, but there's also two acquisitions. Is there something different about the seasonality of those acquisitions perhaps?

Or how would you quantify the various pieces? And if I can get you also to comment on, when you say positive change of form, what form is that currently taking?

Are these discussions about bigger projects? Is the ramp faster that you're discussing?

Because there is a lot of confidence about 2Q through 4Q.

Yes, with regards to the first question, when we look at the impact of licenses and the situation in Argentina, we estimate that between $15 million to $20 million, there is an ongoing renegotiation of contracts that we don't know where that's going to end in some cases. And then we had the positive impact of Gut and Iteris, both of those companies have some seasonality typically for those companies, Q4 tends to be a stronger quarter.

Then you have, in the case of Iteris, they are mainly in Brazil. In the case of Gut because of what they do, they tend to have a very strong end of the year, and then a slightly lower beginning of the year, and then they become stronger.

When we talk about the conversations with customers, I think that we continue to see some improvement in terms of not just talking about savings, about efficiencies, they are talking again about building new products, building new features, innovation in general. And I think we think that's a positive change of tone in conversations, and we have a number of customers in different sectors that are already engaging into some of those large and very attractive type of projects.

That also gives us, and we see how the bookings are starting to trend in Q1. That gives us some confidence into the rest of the year as well.

Okay. And the second question, this may be about Diego's comment with regards to increased complexity, I guess that might apply to not just AI, but to other projects as well.

Your fixed price contract is now 21% a total, year ago, 17%. And that's a pretty good size jump in terms of how maybe you're engaging with your clients or maybe your clients are engaging with you also.

Could you provide maybe a deeper explanation of that trend?

Yes, definitely. In many occasions, when we engage with the client, and especially when we have the reinvention studios, we can now go deeper into the solution for different industries.

We tend to repeat certain types of solutions and that allow us to go into richer type of contracts like committing putting some skin in the game. This brings the certainty on our client and the maturity on the relationship that allows us to increase that portion of the fixed price.

And it's still, as you see, not significant, but it's visible. And I think it's a good and healthy trend.

The next question comes from Tyler DuPont from Bank of America.

Sorry about that, is that better? It's like every year, it's a Zoom and I still can't figure it out.

Thanks guys. So I'd be curious if we can just start by double clicking on the types of conversations you guys are having with clients as we begin 2024 with respect to visibility, in particularly with budgeting decisions as we start to firm up for the beginning part of the year.

What are the types of projects that clients seem to be focusing on and are there any particular callouts worth mentioning?

Yes, I would take the first part. So I'm seeing like very much more positive conversations than a year ago and that's remarkable to see the difference between first quarter 2023 and first quarter 2024.

So that's encouraging and that keeps us excited about the opportunities moving forward. More projects are all over the place from AI to Metaverse or spatial computing and going to traditional digital transformation or optimizations.

I mean, we're doing any kind of process in the four studio networks. On the enterprise side, we see very good growth coming from Salesforce, from ERP re-implementation, or transformation.

We're seeing good things on the cloud migration space. Then on the digital space, everything going from the traditional consumer engagement platforms to digital experiences going to AI, so on and so forth.

On the Create Studio, we are moving forward very fast into pitching pretty much every single customer we had out of the 1, 600 customers we have. I'm pretty sure that we will be able to cross-sell there and indeed, as you have seen on our last presentation, we have been pushing a lot on cross-selling so we can go from one network to the other with pretty much all our customers and that has been extremely important.

And of course, the Reinvention Studios, where we play on the airline space, on the retail space, on the many different industries in which we play, we have seen demand in all of them. Talking about specific sectors that has been growing, one is healthcare or life sciences.

The other one is retail and the other one is travel and leisure. Those three sectors specifically have been pushing a lot during this quarter -- during this last quarter and last year, I would say, in general.

So overall, and then I let Diego to go more in-depth about the type of projects, but overall we see a much more positive environment at this same quarter last year.

I would like to add to what Martin said or maybe highlight is two different things. Conversations started to shift more into the revenue generating side of things.

Whether during last year there was a lot about grooming the operation, which is very good. That makes me actually very happy.

Even when we're talking about the Enterprise Studio, we are now beginning projects and discussions about full migration to the cloud, updating et cetera, which can be as you know very expensive and lengthy type of projects. We are seeing the commitment and the investment on the longer term, more transformative side of things.

Okay. That's very helpful.

Thank you. And just as a follow-up, I wanted to touch on what you guys mentioned regarding the sequential math.

As we look through top line growth for 2024, just based on the envelope math here, it looks like the exit rate is somewhere in the 12% -13% neighborhood, let’s call it. So how should we be reconciling that growth profile versus the historical commentary of that high teens 20% plus?

Just sort of any dynamics there?

Yes, keep in mind that the first part of the year, we're talking about growth of around 20% for both quarters. Then in the second half of the year, we are trying to provide a number that will feel comfortable at the beginning of the year.

There's still a lot of uncertainties going on and we didn't want to set the bar in a place that maybe depending on how the economy evolves and how the rest of the year turns out would put us in a difficult situation. So we are starting where we feel comfortable that we see the sequential growth being very reasonable.

When you look at the type of growth that is assumed on a sequential basis, it is quite reasonable given our history. And that's how we ended up with I think relative to the industry, a very strong year-over-year growth of 16.2%.

Our next question comes from the line of Moshe Katri from Wedbush.

Hey, thanks. And we're at some very strong.

Martin as you more about strategy. You've clearly had exposure to Latin America.

I think your numbers lost here. Yes, hear me?

Perfect. So let me just restart.

Can you hear me now? Okay.

So the first one is on strategy. And it seems that you're going to be investing a bit more in Mexico and Brazil.

How big can this be for you guys? Maybe you can give us a feel here, just given the fact that Latin America is a continent is doing much better economically versus North America and Europe.

And Latin America as a region actually had almost 20% growth through the quarter. So maybe some color on that, because I think it's a pretty interesting kind of the --

I don't know if you can hear me, Moshi, because it got cut in the middle, but I would try to articulate the first part of the question, and then I will let Juan. So, Latin America, in my opinion, it would be a very important place moving forward, strategically speaking for the US and for North America in general.

So I believe that Latin America is a central place, not just for us to deliver, but also to keep on evolving our business. So as you have seen with the acquisition of Iteris, we're playing again in Brazil, and I believe that that kind of things will keep on going and we'll keep on insisting on trying to expand our footprint in Latin America.

So again, it's not just an untapped, still untapped place in terms of delivery, but also a market that is improving a lot and that will keep on gaining strategic importance for the whole world. So I believe that's a Globant’s answer to what's going on a geopolitical way in the world and we are very lucky to have this positioning, but we are taking advantage of that and we'll keep on investing and having an increase in our presence there.

And Juan, if you want to add anything into?

No, what I was going to say, yes, Latin America is about 22% of our revenues. When we look at Brazil and Mexico, those are huge economies, very, very large markets, and they are not even the biggest markets for us within Latin America.

So that means that the opportunity that we have to significantly expand our presence in the region is just there. There are very large companies that are growing very, very nicely, some of which we named during the earnings call, where we are really, really performing very, very well.

And we see the same needs and the same type of investments in those companies are the ones that we are seeing in the US and in Europe. So we are very confident about our ability to grow in Latin America.

Okay, and just to follow up is on gross margins. We've had some gross margin pressure throughout calendar ‘23.

What should we look for in terms of gross margins in calendar ‘24? And I guess some of it obviously was FX headwinds related.

Has that trend kind of reversed itself?

Yes, so no, unfortunately, the FX in Colombia, the FX in Mexico, in Brazil, it continues to, it's stable. So it has not deteriorated further, but the trend has not changed.

It's just stable, just where it was during Q3 and Q4. So we continue to have those headwinds in front of us.

And we expect at this point, we expect our margins to be stable relative to 2023 throughout 2024.

And you're going to keep on using SG&A expense leverage to offset that, just to protect your EBIT margins, right?

Yes, I mean, as always, as we, I mean, first of all, we will keep on investing to grow. That's not going to change.

But at the same time, we will do it in a healthy way, protecting margins as much as we can as always and hopefully as the year progresses and the economy globally starts to get a little more optimist related to the future, there is some additional pricing power to hopefully offset some of those FX headwinds that we are seeing.

The next question comes from Divya Goyal from Scotiabank.

Good evening, everyone. Great, quarter.

I wanted to actually get some color on the fixed price contracts based on some of the discussions we've been having with your peers. It seems like there's increased focus in the industry from a fixed price contract standpoint, if you could provide some color on that.

It's exactly that. Whenever we face a solution where we have nice visibility, we've done it before, et cetera.

We can engage in those type of contracts without running into a huge risk. So when we have the opportunity, we think it's a very powerful instrument to gain a client and protect our margins as well.

So the Reinvention Studios, which are focused on gaining depth into different industries, have full focus on this, and that's the increase you have seen. Again, I think in the total proportion, we're talking about a few points, but I think it's a very good and healthy trend.

It speaks about the work they've been doing with the different clients. Typically, these types of engagements are very much transformational.

In many cases, we have a commitment towards what we deliver, what we do, and in other, it has a second tier that has to do with the success criteria of the project itself.

The next question comes from Sean Kennedy from Mizuho.

Great, thank you. Hi, everyone, and thank you for taking my question.

Thanks. So I wanted to ask about Globant Sports and Media Business.

Can you discuss in some more detail the sports opportunity, specifically how you attract new clients and durably grow the business?

In the Media industry.

No, sports.

Sports for us has been extremely important and we have been investing a lot in the space. I believe that there's an opportunity there not just to render services but also to provide platforms and things that accelerate the solutions to our customers.

So I believe that Sportian which is one of the companies that we created associated with LaLiga to be able to leverage that is a very good bet into that space moving forward and by the way the performance that we have seen on that specific company has been pretty rewarding to see how it grew and how we have been able to expand to other markets not just to other markets but also to other sports. Remember Sportian is born based on football, but also now we expanded into rugby, into tennis, into basketball.

By the way, we added Manu Ginobili as one of our members of the board of advisors in Sportian. So we see that on the football space, but also, we see a big expansion into other sports.

And that's nice to see. Also our partnership with FIFA has been instrumental in this idea of evolution in the space.

We're now working on FIFA Plus, but in many other projects now, we are becoming a big partner for FIFA in many different aspects of technology creation. So once you have those anchor clients, being able to keep selling and keep on evolving into other places is much easier.

So to your point of how to predict or how to have visibility into what's coming, when you have those customers, it's much more easy than just having small customers here and there. So I believe that's the core of what we do.

And the outlook for what's coming in that specific space is very good. And the forecast of growth, it's outpacing a little bit, Globant’s growth as a company.

So we're very happy with that. So I don't know, Diego or Juan, if you want to add something into that.

Just a small comment. I think sports has been one of the industries that has been absorbing technology much faster lately.

And if you see the opportunity, how we've been consuming sports, I think there's a huge opportunity. We all tend to think the in-state and in-venue type of experience.

If you look outside that, how consumers, how funds are consuming that from home, that ratio from the people that are physically there to the ones that are not is one to a lot, depending on the type of venue. So we see a great opportunity to totally transform that type of experience.

There's a lot of technology that can be reused across many different sports, coach, software, specific player type of software, loyalty and fan activation, et cetera. That set of reusable content is what we take care of within the studio, but then doing the implementations on the different types of projects and customers.

Again, I think that what made us do that more and investment has to do with the velocity of adoption and I think there's a lot to do on that industry.

Our next question comes from the line of Arvind Ramnani from Piper Sandler.

Yes, thanks for taking my questions. I just want to kind of say if you could unpack kind of how you're thinking about like FY24, right?

Because we certainly heard a lot of things on what's organic, what's from kind of LATAM headwinds, from a currency headwind, and then also like kind of expectations for additional M&A that you may do through the year. So when I think of like kind of like a pure organic growth for this year, how should I think about that?

And then the follow-up to that really is what needs to happen for y’all to kind of comment at the kind of the at least number or comment well ahead of that number by 300, 400 bps.

Yes, I'll take the question. So we started the year guiding 16.2% year-over-year, which I guess is going to be one of the strongest in the industry, by the way.

That is composed of about 10-ish percent of organic growth and the rest coming from the deals that we closed during 2023. When you look at the sequential growth that we are proposing or forecasting as of now for the year, it implies quarters of starting Q2 of 4% to 5% sequential growth that basically is going to give us annualized numbers of 20%, around 20% when we look at that sequential growth.

For us to take that number up, I think it's going to depend a little bit on how the rest of the year evolves in terms of economy. If companies start to materialize, some of those conversations that we are having start to materialize more and more.

They start to invest again in large CapEx projects and things that we are seeing an improvement relative to last year, but still, we believe that more can be done there, right? So if those things happen, if interest rates start to come down, I think that going forward, we may start to see some acceleration into our business.

But for the time being, given those constraints on the macro, we prefer to guide what we feel comfortable that we believe is still a very, very good number.

Terrific. If I could quickly follow up on that.

Last year you kind of wrapped up the year like roughly 11% and arguably like what we heard on from you on today's call, this is much better than last year. So it feels that there's a lot of conservatism built into this like 10% organic number.

But can you just comment on that? Because if you look at these numbers and 10% and do you think there's some level of conservatism built in?

Let me try to address that point. I think that we're not being conservative.

At this point of the year we see optimism that that's a mean that it will keep on translating to the rest of the year because we don't know and basically there's a lot of uncertainty happening. Inflation just was higher than expected last month.

I don't know where the interest rate is going to go. So I think that we need to stay a little bit calm at this very beginning of the year to understand how the year will develop.

But again, we have a very good track record about trying to forecast what's going on and what's going to be the outlook for the year. And I believe this is not either conservative nor extremely aggressive.

So we're trying to make that balance as we have been doing during the last 10 years as a public company. So I hope that explains a little bit.

But of course we don't want to miss any number and we don't want to create any false expectations at this point of the year.

Terrific. And just one quick question on AI.

You certainly got a lot of color. But are you able to comment on the size of the projects that you expect to see for ’24?

I mean, you did indicate it may be larger, but like at what point does it kind of really start to move the needle for your overall growth? Is it still like a ‘25 dynamic would become much larger in size and scale?

Or it's same size now?

It's already growing and it's already pretty substantial. It's a good portion of our business.

I mean, and AI is pretty much involved in everything. So where you got the idea of this is an AI project where it's not, it's every day more difficult because it's involved in pretty much everything with us.

So now, having said that, we have seen projects from several millions going up during this year. I don't think it's going to be the size of projects at least on the last quarters of this, at least at to the point of the last quarter of this year, projects more than $10 million, $20 million, $30 million.

And then moving forward maybe the project of hundreds of millions of dollars may come, but it will take a while until corporations digest and start to produce more demand around that. The good news, Globant is absolutely ready to deliver on all those projects.

And we have been investing a lot and we keep on investing a lot on that space. So our leadership position will be undisputed, will be announcing big partnerships moving forward.

And I think that's something that will keep on being a central part of our offering as it is today to all the customers that we have. 1, 600 customers, all of them need what we do on the AI space.

And of course, we need to leverage all the tools that are out there to be able to provide like comprehensive solution to those things.

Maybe to complement that, Arvind, it's becoming hard to see projects that do not have an AI component. Now, are they a full AI project?

Some of them, yes, some of them, no. But there is always a component here and there that is part of most of the projects that are being discussed as we speak.

Yes, and also, they are adding a lot of things to the projects that were not present before. From data digestion to data analytics to understand more.

And those projects that before were kind of freeze, now they are reviving and they are kind of in a new era of development because it's needed for implementing AI, right? So that's something that we have seen in the past quarters and we can keep on seeing it and I think it will keep on growing moving forward.

The next question comes from the line of Bryan Bergin from TD Cowen.

Hey guys, good to see you. I guess my question is on the first quarter and maybe following up for some more color here.

And as we think about or as you go from 4Q to 1Q, can you just comment on whether there are any particular verticals or large client considerations that are driving that modest quarter-over-quarter decline? Just trying to think if there any aspect of work, like the timing of work getting pushed out?

Yes, part of the, I mean the decline is mainly explained, as I mentioned before, by the one of licenses that we had during Q4 that are not happening again into Q1 and the impact of the depreciation of the Argentinian currency that happened. It was 120% depreciation that happened in December.

Basically that had an impact on those contracts that are in pesos that they have indexes, but they go over time until you recover basically the same level of revenues that you had before. Then on other cases that are in dollars, we have seen some customers coming approaching to us saying, hey, guys, I cannot pay 120% more tomorrow.

So we had to engage into conversations, into negotiations to somehow apply those increases over time, right. So the impact of that is a much lower revenue for those Argentinian customers into Q1.

Those are the main negatives. We are expecting some positive impact also coming from the positions that we did.

But all-in-all, that gives us around $570 million, which sequentially it's 1.8% down. But when you look at it on year-over-year level, we are talking about 20.7%.

And 20.7% year-over-year is one of the strongest numbers in the last several quarters.

Let me correct you. It's not the strongest number, it's the strongest number of all our peers and everybody.

But anyway, that's all.

The next question can come from the lines of Maggie Nolan from William Blair.

Hi, how's it going? Congrats on 20 years and crossing $2 billion.

That's pretty great to see. Just one for me.

So on your pursuit to $3 billion, what's your appetite in 2024 for M&A was obviously an important part of the strategy this past year. Curious how you're thinking about future acquisitions.

What at this scale do you define as a tuck-in versus a more large-scale acquisition? And what are you evaluating in the market?

Yes, our pipeline is strong and we always see companies that can fit and complement what we do, Maggie. And I believe that we'll keep on taking a look at companies.

I believe we did a very strong effort last year to increase our digital marketing space and what it's called Globant Create. I see this year more going to the center of our business rather than keep on expanding.

So I see things happening there. Although, we may have also tuck-in acquisitions always here and there, but I believe that's the strategy for this year.

And Globant and has grown mainly organically and this is a very important point to make. But we always see companies because this game is about these 1, 600 customers we have.

It's about how we can provide to them as many services as possible connected to what we do, which is technology. And technology is invading pretty much every aspect of the company, so we need to be able to keep on expanding as technology evolves into more and more places.

So we cannot pretend to be good at 100% of the things, so sometimes we need to do those tuck-in acquisitions to acquire new abilities we didn't have before. And that's a very good use of capital, a very good use of money.

We have demonstrated that in the past, so we hope we can keep on demonstrating that to the future. Now, if you ask me how much, I don't know.

Tuck-in, for us, Maggie is still around 5% of our size. And this is so far, we've never done anything more than 5% of our size at that point in time.

So that's how we will define tuck-in.

Our last question comes from the line of Surinder Thind from Jefferies.

Thank you. I guess from my perspective, I'd like to focus on organic growth here.

As I think about commentary a quarter ago, maybe a bit before that, and I look at where organic growth is at this point in terms of your expectations, it steadily come down. Can you talk about that?

What's causing that? Because it seems like the environment has actually gotten better.

And so in 2023, it was a great year where you guys significantly outperformed all of your competitors, but that spread between your organic growth and what others are forecasting has started to compress. And it's a lot less than it was.

Really? I don't know what numbers are you seeing, but I don't see that compressing at all.

When we're looking at, for example, this morning, one of our players reported about 2.5% area growth. We are talking about 16, which is about 10 -ish organic.

So that's still much, much bigger. But in any case, I think that we need to see how, again, people are talking about our interest rate decreasing in March.

Now it seems that it's not going to happen. There is some more positive tone in terms of conversations clearly.

But again, we cannot control how and when people will change completely their mind and become very optimistic about the future and talking about growth again. And as such, we have to provide numbers that we feel comfortable that we can achieve and that we believe are still way ahead the average of all our peers.

But I guess ultimately, would you disagree with the statement that your organic growth expectations have come down over the past quarter or two?

Well, I mean, the market was expecting a bigger number back in November. I think that everybody was expecting the economy also to be again, much stronger by now with interest rates coming down.

That hasn't happened, inflation yesterday came above what people were expecting. So again we think that starting the year at 10% plus organic growth is a very good number.

Of course, we would like to do much more than that. We would like to 20%, 25%, whatever.

But that's what we can guide responsibly at the beginning of the year.

Okay, no, that's fair. I don't disagree.

I mean, 10% is an excellent number in the environment. It was just on a relative basis.

Yes. And again, we're starting the year.

It's the moment to adjust any expectation and to be able to generate the space for us to keep on growing, right. And this is what we have been doing in every single quarter since the last many, many years.

So I strongly believe that we may surpass that number. But this is what we want to guide at this very moment.

And by the way, on your comments, and I totally agree that there's a lot of competitors out there. I still believe we have the best-in-class and by far growth proposed for 2024.

So even on the organic growth side, and I believe that we will keep on delivering that differential performance that characterized Globant in the past, so.

Okay, thank you. I mean, I had no disagreement that you guys are definitely have the highest or the strongest outlook for 2024.

So thank you.

Thank you, Surinder. That will conclude the Q&A section for today.

Thank you all for joining the call. I will now ask Martin to provide some closing comments.

Please go ahead, Martin.

Hey, thank you so much. Thank you, everyone, for participating here.

We are really happy with our performance 2023 and the outlook for 2024 and really looking forward to keep on talking in the next quarters. And thank you for your support and for your patience and for your understanding.

Thank you. Bye-bye.