Good afternoon, and welcome to Globant's first quarter 2025 earnings conference call. I'm Arturo Langa, Investor Relations Officer at Globant. All participants on this call will be on listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded and streamed live on YouTube. By now, you should have received a copy of the earnings release. If you have not, a copy is available on our website, investors.globant.com. Also, you will find our shareholder letter, which contains the same content as the prepared remarks you will hear today. In order to craft a more engaging and interactive session, we've shortened our prepared remarks and allocated more time to the Q&A section. We will begin with remarks by our Chief Executive Officer, Martín Migoya, and our Chief Financial Officer, Juan Urthiague, followed by a Q&A session where they will be joined by Chief Executive Technology Officer, Diego Tartara, and our Chief Operating Officer, Patricia Pomies. Before we begin, I would like to remind you that some of the comments on our call today may be deemed forward-looking statements. This includes our business and financial outlook and the answers to some of your questions. Such statements are subject to the risks and uncertainties as described in the company's earnings release and other filings with the SEC. Please note that we follow IFRS accounting rules in our financial statements. During our call today, we will report non-IFRS or adjusted measures, which is how we track performance internally and the easiest way to compare Globant to our peers in the industry. You will find a reconciliation of IFRS and non-IFRS measures at the end of the press release we published on our Investor Relations website, announcing this quarter's results. I will now turn the call over to Martín Migoya. Hello and good day, everyone. It's great to be here again. We're pleased to report another solid quarter with revenues reaching $611.1 million, representing a healthy 8.6% year-over-year growth in constant currency, outperforming most of our peers. While our Q1 performance came in below our initial expectations and our revised annual guidance now aligns more closely with broader industry trends, we remain confident in the strength and resilience of our business. The fundamentals that fuel Globant's long-term growth are strong. The AI opportunity is both profound and transformative. It is a market that could reach $4.3 trillion by 2035. Our 10 years of strategic investment in artificial intelligence uniquely position us to lead this new era. We're not merely adapting; we're helping define the AI-powered future of work and digital transformation. That said, we're currently operating in a challenging macroeconomic environment. The probability of a recession in the U.S. has risen significantly since February. Consumer spending has softened, and uncertainty from trade tariffs has impacted a good portion of our customers. We observe a slower pace of pipeline conversion in the U.S., and growth in some countries in Latin America has been lower than expected. Although some near-term challenges are present, we see these as transitory, as the pipeline remains robust with a 20% increase over last year. I'm also pleased to see strong growth in markets where Globant has undertaken major investments recently, including our new markets region of the Middle East and APAC, as well as Europe. In this environment, we need to stay focused on long-term value creation and transformative impact. Our way forward is based on three core pillars. First, our 100 square accounts. One of the greatest assets is our 100 square customer base and the distribution network we have built over time. Throughout our history, we have consistently added new studios and practices such as Digital Enterprise and GUT creative studios as innovative services to distribute across a set of clients who value us for pushing boundaries and delivering forward-thinking solutions. We continue to deepen these relationships with these strategic clients, aiming to unlock new opportunities and deliver transformative value across their business units. Second, our AI studios. They are purpose-built to lead comprehensive AI transformation programs for each industry we serve. Their mission is to help clients realize the full potential of AI, conducting in-depth assessment across all business areas, identifying use cases, processes inefficiencies, and emerging opportunities for intelligent automation. From this foundation, our AI studios design and implement scalable AI-powered solutions that target the most impactful workflows and business outcomes. This industry-specific structure approach is supported by our deep technical expertise and our Enterprise AI platforms, enabling the orchestration of intelligent agents that deliver measurable innovation and lasting value to our clients. Finally, the Globant subscription model. This model reimagines how we deliver engineering, creativity, and automation services by introducing a consumption-based subscription framework. Clients subscribe to AI-powered capacity through AI Pods, which are dedicated delivery units that combine the power of autonomous AI agents powered by Globant Enterprise AI, with the orchestration and oversight from our experts. Delivery is limited in tokens, representing the complexity and volume of work performed. Clients can expand their usage through additional PAX subscriptions, offering a clear, scalable path to increased value over time. This consumption-based model aligns incentives around outcomes, not ours. It offers a flexible and transparent way to collaborate with our clients while complementing our traditional delivery models. This transformation will integrate directly into our existing client relationship teams and build on the strong relationship we have established with our network of incredible clients, a network built on trust, long-term collaboration, and shared appreciation for innovation. YPF has already adopted this model. JM Family and other enterprise clients are exploring it as well, demonstrating early traction and trust in this new way of engaging with Globant. The Globant subscription model was born from our deep understanding that many organizations struggle to make the savings and efficiencies generated by AI tangible. While the potential of AI is clear, converting this promise into concrete business outcomes remains elusive for most enterprises. Our model addresses this challenge directly, delivering measurable results through defined outputs, traceable token usage, and integrated performance monitoring, making AI's value visible, actionable, and aligned with strategic goals. While we expand our commercial models, we also want to reaffirm the importance of our traditional delivery methods. Fixed-price and time-of-material contracts remain the predominant form of engagement with our clients. Many organizations will continue to prefer these models, and we are fully equipped with the right talent, proven methodologies, and a robust value framework to deliver excellence through them, as we have been doing during the last 22 years. This quarter, within Globant Enterprise AI, we introduce Globant CODA, a powerful agent-driven suite. It brings together our most advanced AI agents and platforms into a single cohesive solution that simplifies and accelerates the entire software development lifecycle. Weeks ago, Globant's Code Fixer AI agent achieved the highest score on the SWE- bench Multimodal benchmark, a prestigious data set for evaluating AI systems on visual software engineering tasks. In this context, our ability to evolve becomes our competitive advantage. Our new AI-powered subscription model is helping us to create more scalable, predictable, and adaptive partnerships with clients, enabling continuous delivery of engineering, creativity, and business process automation through our AI Pod and Enterprise AI platforms. During this quarter, we closed several strategic deals that reflect the creative application of our technology solutions. In the Middle East, we announced a new reinvention partnership with the Saudi Pro League, implementing our Competition Management Solution. With a new platform, future SPL systems will be managed through a digital ecosystem. This will be powered by AI and data analysis to speed up manual tasks and allow competition staff to focus on innovation. In the United Kingdom, we have reached a major milestone through our partnership with Formula 1. We recently launched the new Team Content Delivery System at the Australian Grand Prix in 2025. This innovative technology solution is designed to enhance the competitive experience for race teams by providing engineers and team principals with real-time and archived video and data analysis. We're also partnering with AIB on their Teller app. Teller is a specialized transaction processing application in AIB Northern Ireland branches, integrated with AIB's core system to support efficient transaction management. The bank undertook a significant upgrade on the application to further enhance performance and resilience. We accelerated the development using Globant Enterprise AI to ensure delivery in a record time of eight months. In Argentina, we recently announced a reinvention partnership with YPF, the continent's third-largest oil and gas company. We will improve their supply chain management with agentic AI, and we will create an integrated operating model that will continuously learn and evolve. It will make complex decisions through expert-supervised algorithms and ensure compliance with the company's internal policies and standards across their extensive supply chain network of approximately 5,000 suppliers. Globant's effort connects with YPF's vision to enhance operational efficiency across all areas and position the company as a global competitive player, generating $30 billion in exports by 2030. Our creative GUT Network continues to produce outstanding work for top brands globally, including Corona for its 100th anniversary in Mexico, Foodpanda with a new affordability campaign across six Asian markets, and Mercado Libre's ongoing expansion. Our global partnerships also continue to evolve. In recent months, we received multiple recognitions from Google, Amazon Web Services, and Adobe, reflecting the strong focus in developing these strategic relationships. As a founder and CEO, I'm deeply committed to our reinvention vision. We remain focused on delivering high-value solutions that reflect both human ingenuity and technological excellence. We will continue to evolve our core strengths and business models while pursuing long-term value creation. Thank you very much. Hello. In the first quarter, we continued to navigate a fluid global context. Revenues reached $611.1 million. This represents a 7% increase year-over-year and 8.6% in constant currency, a figure slightly below our February guidance. This performance was influenced by the challenging macroeconomic and geopolitical context, which has affected spending patterns among some of our largest customers, particularly in Latin America. The market deteriorated towards the end of February as a result of the tariff discussions. Still, three of our four regional business units posted solid growth: North America, increasing top line 6% year-over-year; Europe, 13.4% year-over-year. New markets continued to scale exponentially, posting an 84.4% year-over-year growth. However, we saw a challenging performance in LATAM, which was down close to 9% year-over-year, with notable contractions in Mexico and Brazil, which were partially offset by strong growth in Argentina. From a vertical perspective, we saw year-over-year growth across most of our verticals. However, we experienced some delays in project ramps, specifically in some large accounts in tariff-impacted industries such as airlines, pharma, and high-tech. Our revenue per IT head increased by 2.8% year-over-year and 2.3% quarter-over-quarter in the first quarter of 2025, reflecting the value and efficiency we deliver and our ability to remain disciplined in pricing. Turning to our margin trends, our adjusted gross margin for the quarter stood at 38%, flat on a year-over-year basis, reflecting our premium positioning, geographic diversification, and improving service mix. Our adjusted operating margin for the quarter was 14.8%. While this metric fell short of our expectations, this was mainly driven by our lower-than-expected revenues. Our adjusted net income for the first quarter of 2025 was $67.8 million, translating into an adjusted delivery EPS of $1.50 for the quarter, almost flat on a year-over-year basis. Turning to our balance sheet, as of the first quarter of 2025, our cash and cash equivalents and short-term investments stood at $120.2 million, and our net debt was $167 million, translating into a healthy low net debt ratio, reflecting our prudent balance sheet management and providing us with substantial financial flexibility and liquidity. Regarding free cash flow, we consumed $5.7 million in the first quarter, in line with prior years. Looking ahead, considering the impact on our customers of the macroeconomic uncertainties and tariffs, and given our exposure to B2B2C customers, which affects our visibility, we have undertaken a thorough review of our forecast with the goal of de-risking our estimates to the extent possible. Based on this, we're introducing our second quarter 2025 guidance of at least $612 million in revenues, or 4.2% year-over-year growth. This expected growth includes a neutral effects impact. For the full year 2025, we are revising our revenue guidance of at least $2,464 million, which represents 2% year-over-year growth, which translates into a similar figure in constant currency terms. In terms of profitability, we are targeting an adjusted operating margin of at least 15% both for the second quarter of 2025 and the full year 2025. The IFRS effective income tax rate is expected to be in the 20%-22% range for both the second quarter and the full year 2025. For adjusted diluted EPS, we forecast at least $1.52 for Q2, assuming an average of 45.7 million diluted shares outstanding during the second quarter, and at least $6.10 for the full year 2025, assuming an average of 45.8 million diluted shares outstanding during 2025. We are taking clear and decisive steps to maximize our financial health and navigate the current environment effectively. Our short-term focus for the remainder of the year will be on driving growth through strategic investments in our AI Industry studios and our 100-square accounts, while focusing at the same time on protecting our margins and cash flow. With respect to margins, the main areas of focus are: optimizing utilization, which stood at 78.2% in Q1 2025 compared to 79.3% in both previous quarter and Q1 2024, disciplined pricing strategies, strategic geographic mix of our talent and revenues, footprint optimization and infrastructure streamlining are ongoing, particularly through the integration of recently acquired companies. SG&A investments will be sharply focused on bolstering our sale capabilities and go-to-market initiatives, while concurrently maintaining a lean overall structure. As of Q1 2025, adjusted SG&A as a percentage of sales stood at 18.3%, and we target this metric to trend downwards by the end of the year as our top line expands. With regards to our cash generation, we are actively working to improve this critical metric through several initiatives. These include: extending supplier payment terms wherever possible, targeting a reduction in our DSO, and implementing a significant reduction in our capital expenditures, with a clear prioritization towards investments in artificial intelligence, a prudent M&A activity to ensure accretive transactions in a fluid market. However, as discussed by Martín, we will remain bold in our technology bets and will continue to execute decisively on our long-term strategic goals. This balanced approach is of utmost importance to us. Thank you for your continued support. See you shortly at the Q&A session. Thank you, Juan, and hi everyone. As we go through the Q&A section of this call, I'll first announce your name. At this point, please unmute your line and then ask your question. Please mute your line after your question is done. I would also like to ask for you to please limit yourself to one question and one follow-up. With that in mind, we will take our first question from the line of Tien-tsin Huang from JPMorgan. Tianxin, please go ahead. Your line is open. Hey, thank you, Arturo. I just want to—I know the environment has been challenging for a lot of the companies here. I'm just curious, how quickly do you think you can recover some of the demand or spend, specifically in Latin America? Just to start with that, because it sounds like that's where a lot of the change emerged. What are you doing to re-energize growth there? Have you seen some of the work get canceled? Are these just delays? I'm just trying to get a better understanding of how that might shape up here in the short term and the midterm, starting with LATAM and the other areas that were a little troubled. Thank you. Hey, Tien-tsin, how are you? Thank you very much for the question. Listen, I believe that, I mean, there's a piece of information inside what we said on my initial opening that was the size of the pipeline. Surprisingly, the size of the pipeline is 20% higher than in the same period last year and even higher than Q4. That's a pretty good sign of how things are evolving. I think that many of the deals are just being delayed. Mexico is suffering, Brazil is suffering, and there's a lot of uncertainty and decisions just being pushed out. That started a week later than our February earnings call. Evolving into this quarter that we're reporting now, we want to be very sensible about that information and saying, listen, we're seeing an adjustment for the full year. I see a pretty good probability for Q2 and not seeing major struggles, of course, unless something good, new news appears in the market, which I don't think is the case. I see that number quite solid right now and the full year too. Recovery in Latin America is already happening. I mentioned some of the deals that are pushing us forward. Some of that recovery is coming from Argentina. Some of that recovery is coming from Chile and some other geographies. Mexico is also improving slowly. It's not being seen on the numbers of Q1, but we are seeing it a little bit better. With all that, I think we're going to have like a quarter like we're describing Q2. You know, unfortunately, the whole year was lower than what we expected at the very beginning of the year. I don't know, Juan, if you want to add something to that. Maybe hello to Tien-tsin. So basically, you know, when you look at the Q2 number, which is just slightly above where we ended Q1, the idea is that we're trying to put out a guidance for the year, which, you know, if you do the math, it's basically a very similar second half relative to the first half. We are trying to be sensitive enough so that the rest of, I mean, the rest of the year looks at least where we are today. You know, we don't see further deterioration. When you look at the second quarter number, we feel it's quite solid at this point. So that seems to be kind of a lower end, basically, or a bottom for the year. The pipeline that Martín is describing, you know, is what somehow gives us some comfort of hopefully a better second half, which it's not embedded in the numbers that we are providing, because we do not want to go through another situation where, you know, the uncertainty does not allow us to put out the numbers that we want. The business is there, the pipeline is there. We are trying to put numbers in a place where we feel comfortable and we are confident we are going to be able to meet at least the $612 million that we guided for the second quarter. Yeah, I would like to reiterate, Tien-tsin, the, I mean, the amount of opportunities, the quality of the opportunities, I think is outstanding. The things that are happening on the market with the technology is outstanding. Just the people are saying, okay, let's put this on hold, let's put that on hold. In many different industries, I would say that financial services was, you know, the least affected. Then all the rest of the lines were kind of in tough environments, right? The long term, the long term, again, the long term for the business, I think, is outstanding. The amount of opportunities are raising. The quality of opportunities are raising too. I'm very positive about the future, as always. Okay. I know it's unusual for Globant to miss the quarterly outlook. I'm sure you'll learn and you won't look at it. I'm just curious. Ability that if things do deteriorate and if deals do continue for whatever reason, do you have levers to pull to protect the margin and the profits, given what we've learned so far since late February to date? Do you have levers to pull? Yeah, I guess the line is a little bit tricky, tropey, but I think you asked about protecting margins and profitability if the business deteriorates. As I discussed in my remarks, we have already taken a number of measures to protect those margins and protect operating margin as well and to meet the EPS guidance. We feel that those measures that are in place should be, at least for what we see the business today, they are enough. Definitely, if we see another change in the market, we will be able to, we will have to take further additional measures to protect profitability. I mean, we definitely believe that growth is okay, but it's also important profitability and protecting margins. That is why we mentioned specifically a number of things that we are doing. Also on the cash flow front, right? We are trying to take measures in every front until we see, you know, an acceleration on the top line. Yeah, high priority initiatives, all of them. Thank you. Thank you, Tien-tsin. Thank you. Thank you, Tien-tsin. The next question comes from the line of Jim Schneider from Goldman Sachs. Jim, please go ahead. Your line is open. Good afternoon. Thanks for taking my question. First of all, I was wondering if you could maybe frame for us sort of the backlog that you see, not the pipeline, but the backlog of signed contracts and maybe your coverage level of backlog relative to the revenue guidance at this point in time, maybe comparing that versus what you would have seen in Q1 of last year, maybe just as a first start. Yeah, so for the high, Jim, thank you for the question. You know, for the second quarter, I think that the level of comfort, the level of visibility is high enough. You know, we try to make sure that the number that was provided is at least the number that we are targeting and we're trying to meet. For sure, there is more uncertainty for the second half of the year. That is why when you look at our second half implied guidance, it is basically somehow following with the current numbers with just a small improvement in Q3. I think that the way we built the current forecast includes or has embedded the current visibility, which of course is a little bit lower than prior years. That is why we did have to adjust our full year guidance. Thank you. Maybe as a follow-up, could you talk about maybe parts of the U.S. business outside of the LATAM, which is clearly being impacted by tariffs? What parts of the business there slowed? Was it confined to one or two geographies, whether it be airlines or something else? Maybe just talk about the profile of the U.S. business, please. Yeah, look, it was pretty much all over the place. Entertainment was performing, you know, a little bit lower. High tech, it was like lowest. Healthcare also took some dip, although we're seeing it recovering much better now. Travel and hospitality has gone down. It's interesting because, you know, between professional services and financial services, we're kind of the most even performances. But then all the rest that is related to consumer got and took a big hit. So it's pretty obvious to us that it's something much larger than just, you know, one specific sector hitting the thing. I think the fact that, you know, Jim, the fact that we are a company that, of course, we have a wide array of services, but a big part of what we do is still on the growth side, right? On the B2, we have a lot of B2B2C customers with consumers that, you know, somehow are being impacted by tariffs, by the uncertainty of what's going to be like in the U.S. going forward. Those are the industries that initially, at least on many of our customers, put some kind of a break on certain projects. That happens in, as Martín was saying, in trying to retire the automotive, you know, some of the technology customers that we have, some of the retailers. Mostly you see that concentrated on consumer-facing customers. Thank you. Thank you, Jim. Thank you, Jim. Our next question comes from the line of Bryan Bergen from TD Cowen. Bryan, your line is open. Hey, guys, thanks for taking the questions. I wanted to ask you about your top 10 clients. Can you dig in a little bit further on what you saw specifically in some of those accounts and how you are thinking about those accounts now in Q2 in the second half? Obviously Disney and then potentially some Middle Eastern clients and any other ones you think are important to call out. Yeah, yeah. In general, I mean, if you look at the performance on a sequential basis, pretty much most groups performed in a similar fashion, you know. However, already getting into Q2, we see stabilization. That's why the expected number is slightly ahead of the Q1 number. We are not seeing, I mean, probably the ones that have more consumer-facing exposure suffered a little bit more. But in general, already into Q2, we see more stabilization. You know, clearly new markets will continue to outperform with very high year-over-year growth, and we are going to see sequential growth there as well. At this point, we're also seeing positive numbers in Europe, positive numbers in the U.S. Maybe the one region that will stay behind will continue to be Latin America, at least during the second quarter. Okay, okay. How are you managing kind of the, you know, the employee base here and the resourcing plans as you go forward? Can you talk about your intentions here as you move through the balance of the year? Yeah, I think the strategy is the same. I mean, we have been globalizing our delivery footprint in the last 10 years. When we did the IPO, Argentina was 70% of our employees. Today, you know, we have a very balanced portfolio of countries from where we serve, you know, being Argentina, Colombia, India, the three main locations. That will continue to be the case. I mean, we will continue to be a diversified delivery footprint as we are today. That's going to continue. Of course, we will prioritize, you know, where demand is going, as we have always done. In general, the growth strategy doesn't change. Having a global delivery footprint to serve more global customers. As you can see today, you know, U.S. is about 55% of revenues. Europe is getting very close to becoming the second largest, you know, revenue generation area. We have seen a very nice uptick in the share of new markets. We are building a global delivery footprint for a global revenue company for a global market. Right, right. Okay, thank you. Thank you, Bryan. Thank you, Bryan. The next question comes from the lines of Jamie Friedman from Susquehanna. Jamie, please go ahead. Hi, thanks for taking my question. You know, I was wondering if you could comment on the competitive position of the company apropos of application development versus infrastructure. You know, is it difficult to compete purely as a great application development provider, yet having less mind share in infrastructure in this environment? It's interesting to see. I mean, first, I think it's interesting to go through our revenue per head, right? When you see the revenue per head still growing, it's a measure that we are adding more value to our customers and seeking deals that are, you know, a lot of value added for our customers. On the enterprise side and the cloud migration studio, sorry, the cloud ops studio that we have is performing very well. We have very deep expertise there, as pretty much everything we do is going into cloud, into infrastructure side. I think that with all the AI projects that are happening, that area, that specific area is gaining a lot of momentum. I believe that in essence, every day becomes more and more, the AI landscape becomes more and more complex. Every day is more and more difficult to create something only thinking on cloud or only thinking on AI. You need everything together. This is where we're going. I mean, Globant became with time a much more balanced company in terms of our studios. We're playing on the digital side. We're also playing on the enterprise side with a good portion of our business. We're also playing now on the creative side. The three components are very important components of pretty much any solution that you build today. I think that if you only focus on one of them, it would be difficult. As we are very balanced between the three of them, I think that we are in a pretty good position to create much better solutions for our customers through our AI studios, through our now our subscription model, you know, the way to change how companies come by these kinds of services. In some way, we're simplifying the access to technology to companies. This is an extremely important, you know, option that we are providing now to our customers that is being very well accepted and a very good, you know, an important conversation starter for many of our customers. Again, the most important asset we have built are all those customers with whom we have a very good relationship that they value us for how we can innovate, for how we can implement many of the latest technologies to them. I believe that every day more, and that's a testament of how we have been doing things, is about having a balanced approach to technology because it's not just about having one of those things. That's a great, those are great points. In terms of the increase in the revenue per head, that's very interesting. Do you see that more as the revenue realization related to automation or there's a reduced linearity? You know, any context you could give us about the revenue per head would be helpful. Yeah, there is, Jamie, there is a little bit of everything, a little bit of higher value-added services, a little bit of an improvement in how we deliver some of our services. There is also a higher share of Europe and new markets would come at a higher revenue per head than Latin America. You have different factors. Also, there is a lot of careful in terms of managing our pricing. I mean, there is today a lot of deals that, you know, are not good enough in our view. We also try to protect our margins through having, you know, a good grip on pricing. I mean, there is a lot of deals out there that we could get at very low pricing, low margins, or even negative margins. We are trying to put everything in balance. That is why you are seeing our revenue per head going up sequentially and year- over- year. Yeah, and some of our competitors are, you know, like chasing those deals in which you need to pay to get them and then get some kind of deal in exchange of that. We are totally aware of that, saying, listen, we don't want to enter into a deal in which we need to offer any kind of advantage, or maybe I would say in those deals in which we don't like the profit that we are making. I mean, if we're not making a good profit, we walk away. We have been extremely selective on those deals. Buying revenue today is like a pretty common standard in many occasions, and we don't like those deals. Perfect. Thank you so much. Thank you very much. Thank you. Thank you, Jamie. Our next question comes from the line of Maggie Nolan from William Blair. Maggie, please go ahead. Hi, thank you. I'm curious if your margins are different on the Latin American revenue compared to the rest of the business and how maybe softness in Latin America is flowing through the margins and impacting the financials right now. Not necessarily. I mean, margins are, I would say they're not very different in the different regions. You don't see a lot of dispersion there. I think what is relevant is that we need to remain sensitive in terms of how we price the deals, in terms of looking at the right margins for the deals, protecting. I think at the end of the day, you know, it's very easy sometimes to get deals at lower prices. We discussed this many times, you know, taking prices down is very easy. Taking them up again is very hard. It is always a balance. Of course, we don't like to lose deals, and we try to win as many deals as we can. That has to have a limit at some point. I don't know, Maggie. Yeah, also, I think Maggie, hey, how are you? I think that, you know, a good customer with good margin is also a signal of the health of that relationship, right? We always prefer to pursue, you know, healthy relationships and to put that in front of everything. For us, you know, a deal in Latin America or a deal in the U.S., it should be healthy anyway. We have a pretty centralized way of understanding margins and understanding how we want to close the deals. That is something that we try to spread across all the places. I do not know if that answers your question. Yes, that's helpful. Thank you. On the new commercial models, how much traction are you getting there? Is there anything that you can quantify maybe as a percentage or part of your AI revenue? Is your goal to have this become a material percentage of revenue over time? AI revenue is growing a lot. I mean, it's something that is surprising us, the way and the amount of deals. It's interesting to see that that growth is connected to the complexity of the market. As it becomes more and more complex and companies want to implement that. Again, you know, I said this many times, AI projects are very good for media, for social media, and are very easy if you want to do a demo or do it in social media. Then when you want to take it to enterprise levels, it's a totally different game. There's a lot of, you know, activity around that. Pretty much AI is involved in every single project. I mean, there's not a single project that we are pitching today that doesn't have a component. Even in those, you know, very old customers, all of them are getting some kind of flavor and components around that. Now, our latest model, our latest subscription model, what it does is provide the customers with a way of changing that engagement that we have had for the last 22 years into an evolved new model. I will let Diego explain a little bit more about that. I think that having this new conversation is triggering a lot of interest, a lot of early interest from our customers. We have already closed many deals around that. We are not disclosing any number as it is not substantial yet. My plan moving forward is that at some point, we will start disclosing it as it gains momentum. I hope that this is something that will be leading again, right? It's like when you subscribe to any subscription that you may imagine, that you can subscribe to Globant and get the engineering that you need, the creativity that you need, the process automation that you need, and pay for consumption instead of just paying per the hour, only paying with a monthly fee. This is a pretty revolutionary approach. We haven't seen any of our competitors doing it. We're extremely proud that we cracked that nut. As I said on my remark, you know, AI efficiency has been a little bit elusive to become tangible. With this model, what we are doing is we're providing our customers an effective way to make those savings real. Whenever you had a team of five engineers, let's call it that way, now you may have a subscription that is much cheaper than those five engineers. On the back, there's a set of agents, you know, producing the software supervised by a human that allow that the quality and the output does not have hallucination and it is the same Globant quality as always. That produced a much better alignment of interest between our customers and us. That produced something that we are looking for, which is more and more conversations around that new model and that new way of doing things. Do I know, Diego, if you want to add? No, I think, Maggie, to put it super simple, this has been a discussion we've been having about the future of the company and how we provide value. For a long, long time, I think, you know, time and people have been a good proxy of the value being delivered to our client. That is no longer the case. Our immediate approach was, you know, let's engage in a different way. One would think like immediately that that best way and approach has to do with a, you know, turnkey solution, a fixed price. Truth to be told is that we don't like those types of contracts. Let me tell you why. Those have an end. Don't speak about a relationship. Those have a set mandate. The relationship you have with your client makes change, which is, you know, evolving product, discovery, et cetera, a case you do not want. That is not the type of relationship we build. We started exploring a new way of doing things. I think Globant subscription model pretty much represents that. Let's represent the value we are delivering in a different way. Let's measure that. Let's make sure we continue to provide value and efficiencies and quality the way Globant has been doing, but taking advantage of the latest technology and all they can do. Let's take that to the limit. That is what we have put together. Very interesting. Thank you all. Thank you, Maggie. Thank you, Maggie. The next question comes from the line of Jonathan Lee from Guggenheim. Jonathan, please go ahead. Great. Thanks for taking my question. How should we be thinking about the revised growth outlook as it relates to composition between ongoing ramps versus hunting versus farming? How does that compare to composition from prior years? When you look at the full year number today, Jonathan, you look at Q1, you look at the Q2 guidance, you're going to see that it's basically pretty much maintaining the same level of revenues for the rest of the year. The way we are building that is with a majority of that already contracted. We try to, on purpose, to reduce as much as possible, you know, any potential upside coming from coming or even from taking more risk on the farming side. We try to put out a number that we feel it is de-risked to the extent possible. Of course, always things can change. We put a lot of effort into trying to put a number that has a higher degree of certainty than the ones or maybe a lower risk than the one we would have taken in another moment. Given the uncertainty that we are seeing, given that we were expecting a better Q1 than what it ended up being, we're expecting a recovery already into Q2 that is not showing, you know, it's pretty much stable. We try to say, okay, if this is not happening as we expected back in February, let's somehow assume that this uncertainty that we're seeing continues throughout the rest of the year. Let's try to put a number, you know, that removes most of that uncertainty, as I said, to the extent possible. Thanks for that, Juan. And just as a follow-up, you know, can you update us on what you're seeing at your top customer? Understand there was some pulled forward late last year, but is there still an expectation for that account to be up, call it mid to high single digits this year? At this point, we're seeing that account in, you know, finishing around the mid- single digit number, given that it started a little bit below where, you know, we were planning before and looking already into the second quarter. We feel that it should be more in line with a mid- single digit type of year-over-year growth at this point. We are already, you know, in the process of having some conversations about some new things that they have recently mentioned on the press. That is something that's going to take some more time to materialize. Understood. Thank you. Thank you, Jonathan. We cannot hear you. Arturo. Sorry, excuse me. The next question comes from the line of Sean Kennedy from Mizuho. Sean, please go ahead. Hi, thanks for taking my question. I was wondering about the demand environment for professional services. Seems like it recovered, you know, a bit this quarter sequentially. Has your outlook changed significantly over the last few months with AI pressuring the sector broadly? Yeah, so, you know, part of the recovery comes from, you know, during Q4, typically there are four lags in that sector. Those are not in Q1. They typically happen in December. Part of the recovery is there. And we see a stable, you know, a stable number for that industry. We're not seeing big changes, neither positive nor negative. It is going to be stable. We're going to see better numbers in other industries like BFSI. We are going to see better numbers in travel and hospitality. We're going to see better numbers in healthcare, for example. Great. Thanks. For Latin America specifically, are there, I thought Globant was overweight financial services. Is it kind of just a broad pullback in the demand environment, or is it really focused on a few key kind of sectors down there? It's mostly focused on countries than sectors. Argentina is doing extremely well, you know, showing very, very solid growth. That is being offset by some of our customers in Brazil and Mexico. In Mexico, that's mainly BFSI. When you look at BFSI as a whole, you know, we are having good traction in the U.S. We're having good traction in Europe. It is not a sector that as a whole will look bad. It is going to actually look good, even with the issues in some of our customers in Latin America. Great. Thank you. Appreciate the caller. Thank you. Thank you. Thank you, Sean. The next question comes from the line of Divya Goyal from Scotiabank. Divya, please go ahead. Good afternoon, everyone. I just wanted to get some color on the capital positioning of the company with the current macro dynamics. If you could provide how have some of the capital priorities changed and what are some of the imminent measures you are taking or have taken in order to ensure you meet the profitability guidelines that you've put forth? Thank you, Divyal, for the question. I think the first part was about capital, right, and protection of cash flow generation. Am I right? The second part was about margins, just to make sure. Yeah. Okay. So in terms of. Yeah, I wanted to understand the capital positioning of the company. Sorry. Yeah, the capital position. Okay. We closed the quarter with about $155 million in net debt. We have a facility which is up to $725 million. You have to keep in mind that Globant usually consumes cash in the first half of the year and generates a lot of cash in the second half of the year. Having said that, you know, the plan, as I mentioned in my initial remarks, is to protect and actually generate more cash. We have taken measures to make our CapEx investments lower for the year and prioritize those areas that are related to our AI investments at the expense of some of maybe, you know, certain offices and certain things that we were able to postpone for the future. We will be protecting cash flow generation, as I mentioned, cutting or reducing a little bit our prioritizing our CapEx investments, extending DSO payment terms whenever possible to some of our vendors. At the same time, we're working very hard to reduce the DSO. Yeah, and also on the M&A side, right? On the M&A side, we'll be much more focused on really adding value and generating deals that are accretive for the company. Everything changed when the multiple changes. We need to, we have a new reality there and we'll be much more cautious on that specific, much more limited. We have always been cautious. Much more limited in terms of how we do M&A, right? On the margins, the second part of your question, I also mentioned, you know, some actions that we're taking, trying to, you know, work on utilization levels, which are below our target. We are working on efficiencies in terms of infrastructure, offices. We are working on protecting our margin through being cautious in terms of pricing and so on and so forth. That's helpful. Just to complete the discussion here, are you undertaking or anticipate undertaking any specific restructuring efforts in any of the global geographies you operate in? No. No, Divya, that's not in the plan. We see a lot of, as Martín described, the pipeline is there. The need for technology is there. I think uncertainty will have to go away at some point. Companies will continue investing in growth as they have been doing in the last 20 years. Companies cannot avoid, you know, to go through these transformation processes. I mean, pretty much nobody can look away from the efficiencies that can be made using AI in every single sector of the company. The efficiencies that can be done on how you interact with consumers, with customers, how emotional you become when you connect with them. And those things, AI helps a lot. Pretty much no customer in any sector can look away from that. That is materializing into a pipeline growth. Of course, I think decisions will be a little bit more fluid moving forward. We hope that that's the new reality. At the very beginning of the year, it was a little bit tough, even more after we reported earnings with all the tariff things and things that happened that was absolutely unexpected. In any case. That is very helpful. Thank you. Thank you, Divya. Thank you. Thank you, Divya. Thank you very much, Divya. Our next question comes from the line of Arvind Ramnani from Piper Sandler. Arvin, please go ahead. Hi. Hey, thanks for taking my question. Appreciate it. Just a couple of questions. You know, when you think about kind of the updated guidance, I'm really trying to understand, you know, kind of what's going to drive some upside or downside. In the sense, like, you know, if you're looking at this, like, you know, eight months from now and you come in sort of below sort of your updated guidance, you know, what would need to happen? If you were to come back kind of closer to kind of the prior guidance you basically kind of gave three months ago, you know, what will drive that? You know, what I'm really trying to figure out is like, you know, things are moving fairly quickly, both on the tariff side and the macro side. You know, and I don't necessarily want to be overly optimistic or pessimistic, but I'm just trying to figure out the factors that can get us to a different range than what you've guided to. The way, you know, the numbers are built, if you think about our prior guidance, we were expecting to do $623 million at the midpoint. And then Q2, Q3, and Q4 had embedded sequential growth rates there, right? What ended up happening was that right after we reported, we saw a deterioration. It's frozen. I don't know if people are here. Are you hearing okay? Yeah, I'm hearing perfectly. Your video is frozen, but I can hear you perfectly. Okay. So what happened, you know, when we reported was that things got a lot worse. And, you know, we were not able to offset those challenges already in Q1. So we ended up a notch below what we expected. Looking into Q2, we are seeing that we're going to be, you know, just a little bit up relative to Q1, right, sequentially. We are seeing stabilization in other regions. Somehow we said, okay, you know, let's assume that this uncertainty will continue. We cannot assume a meaningful recovery in the second half of the year because, or at least we want to be able to see if things get better, we want to see, we want to be able to achieve that. You know, we cannot put that into the guidance for the year as we did last time. That is how we build the guidance. I think that, as you said, things are moving a lot, very, very quick. What we believe is that the vast majority of what we are seeing was due to all the changes and uncertainty that is happening and impacting our customers. Hence, you know, if those things go away, the pipeline is there. The opportunities are there. The guys on the field are bringing the opportunities. We need to close more, and we need to close faster. If that happens because things get better, there might be some upsides. On the opposite, as you said, you know, if things go the other way, at least what we try to do with this guidance is put a number that we feel is as safe as possible with the current scenario. Perfect. That's certainly helpful. I guess, you know, there's obviously some level of number of working days and everything seasonality that naturally impacts, you know, sequential growth. I understand that. With that said, like, you know, when I look at your Q1, right, it was -5%. Q2 is like flat, which, you know, just mathematically implies like a 500 basis points turnaround in terms of like sequential growth, right? I mean, basically between Q4 and Q4 of last year, Q1, your revenue declined. Now you're seeing it's going to be flat. Q3 and Q4 also is about like flattish, about 1% in order to reach that number. Is there some optimism that's getting you from like, hey, you declined in Q1, but now in Q2, you're going to start seeing like a flat? Yeah, but again, we try to put out a guidance that contemplates the uncertainty that we have in front of us. We see the second quarter stabilizing very clearly relative to Q1 as of now. So the numbers that we are putting to the extent possible include all that uncertainty and hopefully, you know, allow us to at least meet those targets. Great. Just one last follow-up here. You know, I mean, one could argue that, you know, you had like a good macro in January and February and March when things started to shake. April was kind of the worst month. April sits more in Q2. Given that, you know, the last six weeks are probably the most volatile. How have the last six weeks gone for you guys? I think, you going, the second quarter numbers showing some stabilization in a way are part of that. We are not seeing deterioration. That's what I can tell you. That is why the number shows stable numbers throughout the year. We are not assuming any major or any significant improvement in the numbers that we put out. You know, we did take some, I mean, we tried to put a number again that at least we can meet. Perfect. That's so powerful. Thank you so much. Thank you, Arvind. Thank you, Arvind. Thank you very much, Arvind. Unfortunately, that's all the time that we have for the Q&A session today. With that, I would like to turn the call over to Martín for some closing remarks. Martín, please go ahead. Thank you very much, everyone, for participating today. Really looking forward to see you on our next quarters' earnings. Thank you so much. Bye-bye. Bye-bye.