Globant (GLOB) Q2 FY26 earnings call: guidance and Q&A

How long will the transition to AI Pods take to reaccelerate overall company trajectory, and how much of the revised FY26 revenue outlook is due to this intentional model shift versus macro headwinds?

The transition to AI Pods is deliberate and will accelerate growth, with a strong effect expected by the end of next year. The majority of the FY26 guidance revision is due to a reduction in the new market business forecast (e.g., Saudi budget cuts) and impacts on travel clients from oil prices, with a smaller portion attributed to migration assumptions and the overall business environment.

“The majority of it is explained by a reduction in the forecast for the new market business. The week after we reported back in May, there was all this news from Saudi, reducing budgets, delaying projects and things like that.”

asked by Bryan Bergin · answered by Juan Urthiague

What are the anticipated savings from the business optimization programs?

The Q2 impact of the optimization was roughly $32 million, with an additional $20 million to $25 million expected for Q3 to finalize the program. These savings will help offset massive FX headwinds (e.g., Colombian peso appreciation) and fund investments in the Glob.AI business.

“The impact in the second quarter of that was roughly $32 million. We're expecting around $20 million to $25 million for the third quarter, and that will finalize the program for the year.”

asked by Bryan Bergin · answered by Juan Urthiague

What specific areas were impacted by the optimization, and how much was the FX impact in the last year?

The optimization addresses the transition to new AI-focused talent, shifting demand in traditional business (from web testing to data/cloud/implementation), and overall efficiency. The total FX impact for Latin America over the last 1.5 to 2 years is about 4 percentage points, which has been partially offset by increased revenue per head and efficiencies.

“If we were to look at all the currencies in Latin America for the last 1.5 years to 2 years, we are talking an overall impact just for the FX of about 4 percentage points.”

asked by Tien-Tsin Huang · answered by Juan Urthiague

Can you provide an analogy for how Glob.AI revenue per client might ramp, similar to the 100 Squared approach?

The 100 Squared program shows very good traction, with top 50 clients growing 7%. AI Pods have much higher gross margins, and the new model (tokens + supervision per output/consumption) creates different math than the old headcount-based model. While it's early, the new model is gaining momentum and is expected to expand beyond the largest customers to serve smaller segments, accelerating overall revenue.

“We're seeing very good traction on the 100 Squared program. Indeed, it grew -- that group of customers grew -- the top 50 grew like 7%, something like that. It's extremely encouraging, right?”

asked by Tien-Tsin Huang · answered by Unknown Executive

Where is the growth coming from for Glob.AI, and what new budgets is it accessing?

Glob.AI is opening up new budgets beyond traditional software development, expanding into operations and process automation (e.g., agentic work for travel, Know Your Customer). This allows Globant to tackle a much larger scope. The new model also enables market share gains by offering a more efficient and outcome-based approach, leading to customers spending the same or more for increased productivity. Industries like financial services, media & entertainment, and airlines are showing early adoption.

“So that agentic work that this Glob.AI concept is opening up is much larger than the software development life cycle that we have right now on the Glob.AI.”

asked by Margaret Nolan · answered by Unknown Executive

Why won't the deflationary pressure from shifting work to AI Pods cause negative revenue territory for an extended period?

While customers might achieve the same output for less money, the expectation is that they will want to do 'a lot more' with the increased efficiency, leading to an overall increase in spending. The company is willing to take some 'haircuts' on price to accelerate migration to AI Pods, as it leads to higher margins, better competitive positioning, and more business in the long run. The game is about expanding the amount of solutions needed in the new AI era.

“If the customer wants to do the same, it will cost less money. If the customer wants to do more, which is most of the cases that we are finding, they will spend the same amount of money. And the thing is that the customers will want to do a lot more.”

asked by Bryan Keane · answered by Martín Migoya

How does Glob.AI workload split across LLMs, what percentage of clients are new, and what is Globant's unique value proposition?

Glob.AI can use any model (Anthropic, OpenAI, open-weight) based on customer preference, with full independence. The unique value proposition is mixing services, AI, and human supervision to create a frictionless experience for defining, creating, and executing projects, priced per consumption or output. This coordination and elimination of friction, akin to 'AWS of services,' provides accountability and repeatability that raw LLMs lack, making it highly appealing to enterprises.

“Glob.AI is a play of services. Basically, we are mixing in an absolute frictionless way. The creation of the experience and the creation of the software and the definitions that you need with AI and with humans and putting -- and packing everything into a single price and a single price per consumption or per output.”

asked by Arvind Ramnani · answered by Martín Migoya