Globant shares slide as Q2 revenue of $614M misses, guidance cut

Globant reported Q2 revenue of $614.4 million, roughly flat year over year, and cut its full-year outlook, sending shares sharply lower and drawing a securities investigation.

"We are choosing to accelerate these migrations, even if it means a short-term impact on revenue," Chief Executive Officer Martín Migoya said on the earnings call, referring to the company's shift toward AI-native delivery.

Adjusted diluted earnings per share fell to $1.40 from $1.53 a year earlier, while adjusted operating margin came in at 13.2%, below the guided range. The company cut its full-year revenue forecast to $2.428 billion-$2.462 billion from $2.462 billion-$2.508 billion previously, and now expects adjusted EPS of $5.75-$6.15. Third-quarter revenue is guided to $607 million-$615 million.

The post-earnings decline triggered a securities investigation by Levi & Korsinsky into potential violations of federal securities laws on behalf of Globant investors who lost money, the firm said.

Revenue rose 1.2% sequentially but was essentially unchanged from the prior-year quarter, with North America contracting 2.4% and new markets falling 17.7% because of project delays tied to the Middle East conflict. Currency weakness in Latin America, particularly in Colombia, pressured margins by roughly 4 percentage points over two years, Chief Financial Officer Juan Urthiague said. The company took a $32.3 million business optimization charge for workforce alignment and office consolidation.

The bright spot was Glob.AI, the company's AI-native platform. Annual recurring revenue reached $52.8 million as of June, up 61% from $32.8 million in March, with management guiding to at least $110 million by year-end. Glob.AI pipeline stood at $436.8 million, and 45 clients, or 45% of the top 20 accounts, have adopted AI Pods. Revenue per head rose 9.7% year over year to $95,800 on a run-rate basis.

The guidance cut signals management expects the AI transition and currency headwinds to weigh on near-term results. Investors will watch the third-quarter earnings call for updated Glob.AI adoption and margin recovery as the optimization program flows through.

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