Globant (NYSE:GLOB) executives used the company’s fourth-quarter 2025 earnings call to outline what they described as a shift in enterprise demand from AI experimentation to AI execution, while also reporting fourth-quarter revenue that came in above guidance and record free cash flow.
Chief Executive Officer Martín Migoya said Globant is positioning itself as an “AI-native technology solutions company,” centered on its “AI Pods” offering, which he described as AI-powered service units that deliver software and operations outcomes via a token-based subscription model supervised by Globant experts. Management argued this model is gaining traction as clients seek production-grade AI solutions rather than pilots.
Fourth-quarter results and cash flow
Urthiague reported an adjusted operating margin of 15.5%, flat sequentially, citing delivery pyramid optimization and tight SG&A management. Effective tax rate was 23.5%, and adjusted net income was $68.9 million, representing an adjusted net income margin of 11.3%. Adjusted diluted EPS was $1.54.
Free cash flow was a focal point. Urthiague said Globant generated $152.8 million of free cash flow in Q4, the highest quarterly figure in company history, and $211.7 million for the full year, also a record. He attributed the quarter’s liquidity improvement to better days sales outstanding, working capital management, and CapEx efficiencies. Globant ended the year with $250.3 million in cash and short-term investments, up nearly $83.3 million sequentially, and a net debt position of $116.4 million.
Urthiague added that the company repurchased $50 million of shares in Q4 under a plan announced in October 2025 and intends to continue executing the program.
Bookings strength and pipeline commentary
Migoya said Globant delivered its “highest quarterly bookings of the year” in Q4, with bookings up 32.4% year-over-year. He also cited a $3.4 billion pipeline and said the company’s “100 squared accounts” drove 73% of total bookings in the quarter.
In Q&A, management discussed pipeline conversion dynamics, noting that smaller deals have shorter sales cycles while larger deals are still taking longer to close and ramp. The company said it expects onboarding and revenue conversion to accelerate in Q2 and the second half of 2026, leveraging deals closed in Q3 and Q4 and others the company hopes to close by the end of Q1.
AI Pods: business model, early scale, and margin profile
Migoya said AI Pods were launched nine months ago and have moved from zero revenue to an exit rate ARR of $20.6 million in 2025. He described AI Pods as operating on a subscription-based capacity model tied to token consumption rather than traditional hours or seats, and said the customer “owns everything.” He also said AI Pods run on “Globant Enterprise AI,” described as a proprietary platform with interconnected hubs, including routing across “140+ LLMs” while preserving data sovereignty.
Management highlighted AI Pods economics as a differentiator. Migoya said AI Pods gross margins are 45% to 60%, compared to the company’s blended gross margin of 38%. Executives also said those margins are expected to improve as the subscription model scales and the cost per token declines.
For 2026, Globant is targeting $60 million to $100 million in AI Pods exit rate ARR. Migoya told analysts the upper end could be achieved with “not many big customers moving into that model,” while acknowledging it is the first time the company has guided those figures. Management said it is seeing larger engagements—citing transitions of $15 million, $18 million, and $20 million—move toward the model.
Migoya also addressed cannibalization concerns directly, saying he is “not in a position to prevent cannibalization” and that he wants the shift to occur. Management characterized the transition as a rational migration that should gather momentum through 2026, and CFO Urthiague said the AI Pods model “by definition, requires less people,” which should be positive for revenue per head and margins as AI Pods become a greater share of revenue.
Globant said its AI Pods pipeline reached $283 million in Q4, up 34% versus Q3, representing 8% of total pipeline compared with 3% in Q2. Migoya said more than 60 AI Pods operate across clients globally, with 24 new subscription offerings closed in the last quarter.
Client examples and organizational changes
Management offered several examples of AI Pod deployments. Migoya cited work with EmployBridge, Banco Galicia, YPF, FIFA, LaLiga, and Santander, describing outcomes including cycle-time reductions, productivity improvements, and cost reductions. He said Globant’s initiative with FIFA reduced costs by 20% without compromising engineering velocity or quality. For YPF, he said Globant’s solution reduced contract process cycle time by 30% to 40% and increased supply buyer productivity by up to 50%.
Chief Technology Officer Diego Tártara said Globant overhauled its delivery model by bringing teams previously under delivery and operations into the technology organization to reduce silos and improve cohesion between solutions and execution. He also described work with a North American bank modernizing its credit and debit card platform on AWS, an AI-powered automation project for Trafilea that he said made store migrations 40 times faster, and an AI system for PharmaMar that he said delivered more than 90% accuracy in complex data retrieval and reduced time to insights up to 15-fold.
Tártara also discussed partnerships and certifications, including AWS competency certifications in financial services and media and entertainment, an SAP Partner Excellence Award 2025 for delivery quality in Latin America, and expanded Salesforce ecosystem distinctions. He said Globant will present at NVIDIA GTC in March on LaLiga’s AI program.
2026 guidance and regional/vertical commentary
For full-year 2026, Urthiague guided revenue of $2.46 billion to $2.51 billion, implying 0.2% to 2.2% year-over-year growth with an estimated 100-basis-point FX tailwind. The company guided adjusted operating margin of 14% to 15%, reflecting ongoing currency and statutory cost headwinds. IFRS effective tax rate is expected to be 21% to 23%, and adjusted diluted EPS is guided to $6.10 to $6.50 on an assumed 44.2 million diluted shares.
For Q1 2026, Globant guided revenue of $598 million to $604 million and adjusted operating margin of 14% to 15%, with adjusted diluted EPS of $1.44 to $1.54 on 43.7 million diluted shares.
In Q&A, Migoya said the upper end of the revenue guidance assumes strong AI Pod demand plus some improvement in the overall market, while the midpoint assumes “more or less more of the same” macro backdrop. On Latin America, management said the region recovered in the second half of 2025 and was the fastest-growing region in the quarter, adding it did not see headwinds from Latin America, while noting Mexico was “a little bit of an unknown.”
By vertical, management said financial services grew about 13% in 2025, and it cited consumer retail and manufacturing as performing well. Executives said professional services had not recovered in 2025, while technology was showing signs of improvement with big deals “shaping up.” They also pointed to healthcare and gaming as areas supported by signed deals that are ramping.
About Globant (NYSE:GLOB)
Globant is a digitally native technology services company founded in 2003 in Buenos Aires, Argentina. Specializing in software development and digital transformation, Globant partners with enterprises to conceive, design and engineer software products and platforms. The company leverages agile methodologies and proprietary delivery frameworks to accelerate projects in areas such as cloud migration, user experience design, data analytics, artificial intelligence and blockchain-enabled solutions.
Globant’s service offerings span strategy consulting, custom software engineering, digital experience design and managed services.
