Globant (GLOB) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $607.1 million, exceeding guidance, with strong free cash flow and operating margin within the guided range.

• AI-native services, especially AI Pods, are now central to the business, with AI Pods ARR at $32.8 million as of March 2026 and a $352 million pipeline.

• The company reaffirmed the midpoint of its full-year revenue outlook, narrowing guidance and expressing confidence in sequential growth for the remainder of 2026.

• Strategic partnerships with hyperscalers and AI leaders (OpenAI, Anthropic, AWS, Google, NVIDIA) expanded, reinforcing the AI-native orchestration strategy.

• Announced a new $125 million share repurchase program after completing the previous program, reflecting disciplined capital allocation.

• Operates as a pure play in digital and cognitive transformation, leveraging next-gen software and AI to drive client innovation and efficiency.

• Maintains a global presence with 28,500+ employees across 35 countries, serving a blue-chip, recurring customer base.

• Recognized for rapid revenue growth, industry-leading margins, and successful integration of bolt-on acquisitions.

• Launched AI-powered solutions and subscription-based AI Pods model to accelerate digital transformation for clients.

Financial highlights

• Q1 2026 revenue was $607.1 million, down 0.7% year-over-year but above guidance, with a 400 bps improvement in trajectory from last quarter.

• Adjusted gross profit margin was 37%, impacted by LATAM currency strength and statutory cost increases.

• Adjusted operating margin was 14.1%; adjusted net income was $65.2 million (10.7% margin); adjusted diluted EPS was $1.50.

• Free cash flow was $36.1 million, the first positive Q1 free cash flow since 2019, with a free cash flow to adjusted net income ratio above 55%.

• Top 50 clients grew 5.2% year-over-year, top 10 by 4%, and the two-to-five cohort by 8.2%, all above company average.

• LTM Q1'26 total revenue reached $2.5B, with a 25.6% CAGR from 2014 to 2025.

• LTM Q1'26 revenue per IT professional was $88.0K.

• 95.7% of LTM Q1'26 revenue came from existing customers in LTM Q1'25.

• Net income for Q1 2026 was $38.8 million, up from $30.5 million in Q1 2025.

• Cash and short-term investments totaled $200.5 million as of March 31, 2026.

Outlook and guidance

• Q2 2026 revenue expected between $610 million and $616 million, with sequential and potential year-over-year growth.

• Full-year 2026 revenue guidance maintained at $2.462 billion–$2.508 billion, implying 0.3%–2.2% year-over-year growth.

• Adjusted operating margin for the year expected between 14% and 15%; adjusted diluted EPS range of $6.10–$6.50.

• Guidance assumes stable conditions in the Middle East; lower end of guidance reflects potential deterioration in that region.

• Positioned to benefit from a projected 73.5% five-year CAGR in generative AI market by 2028.

• Focused on expanding large accounts, pursuing strategic acquisitions, and increasing sales coverage.