GLOB's Q1 Earnings & Revenues Miss Estimates, Stock Tumbles

Globant GLOB reported first-quarter 2025 non-GAAP earnings per share (EPS) of $1.50, missing the Zacks Consensus Estimate of $1.58. It reported earnings of $1.53 per share in the prior-year quarter. 

Revenues in the quarter totaled $611.1 million, lagging the Zacks Consensus Estimate of $622 million. However, the top line rose 7% year over year, driven by secular growth trends in AI-related opportunities and healthy business momentum. Globant’s management highlighted the company's intensified focus on AI and automation. Among its visions is 100-squared client-centric model, which is a strategic initiative aiming to maximize value from 100 top clients through cross-industry innovation and subscription services. Continued innovations in AI Pods, Enterprise AI Platform and AI Studios augur well.

However, GLOB is facing a tough macroeconomic environment. Since February, the risk of a U.S. recession has increased. Consumer spending is down, and trade tariffs have created uncertainty for many customers. In the United States, pipeline conversion has slowed, and growth in some Latin American countries has been weaker than expected. Management had projected first-quarter revenues to be between $618 million and $628 million.

In response to the mixed performance, GLOB’s shares plunged 30.1% in the pre-market trading on May 16, 2025. Shares of the company have lost 20.8% against the Zacks Internet- Software and Services industry’s growth of 32.7% in the past year.

For the year ended March 31, 2025, GLOB catered to 1,004 customers. For the same period, GLOB had 346 clients that brought in more than $1 million in annual revenues, up from 318 last year, indicating a deepening enterprise foothold.

Its top customer, top five customers and top 10 customers accounted for 8.8%, 20% and 29.1% of revenues, respectively.

Segmental Details

Revenues from Media and Entertainment (19.7% of net sales) inched up 0.3% year over year to $120 million.

Technology & Telecommunications revenues (9.5%) fell 7.1% year over year to $57.8 million.

Travel & Hospitality revenues (12.7%) soared 24% year over year to $77.8 million.

Consumer, Retail & Manufacturing (18.5%) grew 3.5% year over year to $113 million.

Globant S.A. Price, Consensus and EPS Surprise

Globant S.A. price-consensus-eps-surprise-chart | Globant S.A. Quote

Professional Services (10.2%) were down 1.1% from the prior-year quarter to $62.5 million.

Banks, Financial Services and Insurance (20.7%) were up 23.1% year over year to $126.2 million.

Healthcare revenues (7%) declined 1.2% year over year to $42.6 million.

Revenues from Other Verticals tallied $11.2 million (1.8%), up 31.2% year over year.

Regarding region-wise revenue distribution, North America led with 55.5% of revenues, driven by the United States. Latin America, led by Argentina, contributed 19.6%. Europe accounted for 18.2%, with Spain as the top market. New Markets, including Saudi Arabia, represented 6.7%.

Other Details

Non-IFRS adjusted gross margin was flat year over year at 38.3%. This stability highlights its strong market position, broad geographic reach and a shift toward higher-value services.

Non-IFRS adjusted profit from operations margin was 14.8%, down from 15% in the prior-year quarter.

Adjusted net income for the period was $67.8 million, flat year over year.

Cash Flow & Liquidity

As of March 31, 2025, GLOB had cash, cash equivalents and short-term investments of $120.2 million compared with $156.1 million as of Dec. 31, 2024.

During the quarter, it generated $15.7 million in cash from operating activities compared with $10.7 million in the previous year.

GLOB’s Q2 and Full-Year 2025 Guidance

Revenues for the second quarter are expected to be at least $612.0 million, up 4.2% year over year with no FX impact.

The company forecasts a non-IFRS adjusted profit from operations margin of 15% and a non-IFRS adjusted diluted EPS of $1.52.

GLOB anticipates fiscal 2025 revenues of $2,464.0 million, indicating 2% year-over-year growth with no FX impact.

The non-IFRS adjusted profit from operations margin is expected to be 15%, with non-IFRS adjusted EPS of $6.10.

GLOB’s Zacks Rank

GLOB currently carries a Zacks Rank #5 (Strong Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Firms

Tyler Technologies, Inc. TYL started 2025 on a strong note with reporting better-than-expected first-quarter results. The company reported first-quarter non-GAAP earnings of $2.78 per share, which beat the Zacks Consensus Estimate by 8.6% and increased 28.9% year over year.

In the past year, shares of TYL have gained 17.1%.

Sabre Corporation SABR reported a break-even first-quarter 2025 bottom line against the Zacks Consensus Estimate of earnings of 1 cent per share. The company had incurred a loss of 2 cents per share in the year-ago quarter.

In the past year, shares of SABR have declined 3.3%.

RingCentral RNG reported that in the first quarter of 2025, non-GAAP earnings were $1 per share, surpassing the Zacks Consensus Estimate by 4.17% and increasing 14.9% year over year.

In the past year, shares of RNG have declined 24.1%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research