Globant 2025 Q3 Earnings Slight Revenue Growth as EPS Declines 26%

Globant (GLOB) reported mixed Q3 2025 results, with revenue slightly exceeding expectations but EPS falling short of guidance. The company’s $617.1 million revenue beat by $1.75 million, while adjusted diluted EPS of $1.53 missed the $1.54 consensus. Q4 revenue guidance of at least $605 million signals a 5.8% year-over-year decline, reflecting macroeconomic challenges and sector headwinds.

Revenue

Globant’s Q3 revenue grew 0.4% year-over-year to $617.14 million, driven by operational efficiencies and a favorable foreign exchange environment. The company maintained its adjusted gross profit margin at 38.1%, with free cash flow reaching $67.5 million.

Earnings/Net Income

The company’s IFRS net income dropped 24.9% to $34.19 million, with diluted EPS of $0.74, a 26% decline from $1.00 in Q3 2024. Non-IFRS adjusted diluted EPS, however, remained stable at $1.53. While the EPS decline reflects cost pressures, Globant has maintained profitability for 12 consecutive years, underscoring its resilience.

Post-Earnings Price Action Review

Following the earnings release, Globant’s stock initially surged 6.17% month-to-date but retreated sharply post-announcement, falling 10.88%. The stock edged up 0.21% on the latest trading day and 0.61% for the week, though analysts cut price targets amid revised expectations. Despite the short-term volatility, the company’s 12-year profitability streak and strategic AI investments suggest long-term stability.

CEO Commentary

CEO Martín Migoya highlighted progress in AI initiatives, including AI Studios and AI Pods, as growth drivers. He emphasized a "strong pipeline of 30% year-over-year growth" and partnerships with YPF and Riot Games. The CEO expressed confidence in the AI bot offering’s momentum, noting 900 active AI transformation projects. "Our entrepreneurial culture positions us as leaders in tangible AI implementations," Migoya stated.

Guidance

Globant provided conservative Q4 2025 guidance: revenue of at least $605 million (a 5.8% decline YoY), adjusted operating margin of ≥15%, and adjusted diluted EPS of ≥$1.53. Full-year 2025 revenue is expected to reach at least $2.447 billion, with adjusted diluted EPS of ≥$6.12. The guidance reflects cautious optimism amid macroeconomic uncertainty.

Additional News

Globant announced a $125 million share repurchase program, signaling confidence in long-term value. The company also launched a $1 billion AI pipeline initiative, focusing on AI-powered subscription services like AI Pods. Additionally, a strategic partnership with Riot Games to enhance esports experiences was disclosed, expanding Globant’s footprint in gaming and AI integration.

Globant’s Q3 results highlight a delicate balance between steady revenue and declining profitability. While the company’s AI-driven strategy and share buyback program offer long-term promise, near-term challenges—including a projected Q4 revenue decline and elevated tax rates—underscore the need for careful monitoring. Investors should watch execution on cost management and AI adoption rates as key indicators of future performance.