Good afternoon and welcome to the Globant 2015 Second Quarter Earnings Release Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Juan Urthiague, Investor Relations. Please go ahead.

Thank you, operator and thank you all for joining us today on our call to review our 2015 second quarter financial results. By now you should have received a copy of the earnings release, if you have not, copies available on our website, investors.globant.com. Our speakers today are Martín Migoya, Globant's CEO; and Alejandro Scannapieco, Globant's CFO. Before we begin, I would like to remind you that some of the comments on our call today maybe 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 in our Investor website announcing this quarter's results. I would like now to turn the call over to Martín Migoya, our CEO. Martín Migoya: So thank you, Juan, good afternoon everyone and thanks for joining us today. I'm happy to be here to share some of the important highlights that happened during this second quarter of 2015. We had another great quarter both our revenues and EPS came above the upper value of our guidance from the last earning call. Our Q2 revenues were $60.6 million the highest quarterly revenue in the history of Globant and 22.7% year-over-year growth. At the same time adjusted EPS for this quarter were $0.25. This strong revenue growth is a result of the work of our…

Thanks Martin. Good afternoon everyone. I'm going to spend a few minutes taking you through the second quarter results and summarizing the six months year-to-date as well then I will discuss our Q3 and full-year outlook. As detailed in the press release, we posted a strong second in terms of financial results with revenues at the record level of $60.6 million, [implying at] 22.7% year-over-year growth and $0.25 adjusted diluted EPS compared to $0.20 for the second quarter of 2014. Adjusted cash in the case in recent periods there is a strong revenue growth was primarily driven by deeper penetration in our top accounts. Our largest customer on our top 10 accounts grew is planning 49.4% and 30.8% year-on-year respectively. This clear indicator our ability to grow our largest customers is a natural consequence of becoming the preferred partner when they embark on digital transformation prospects. As you know Globant is one of the few pure plays on the merchant technology a space and this is key to validate the grow rates we have been achieving.. Additionally doing Q2 we added a number of strategic accounts to the portfolio including among others one of the largest flight manufacturers in the world and the largest European food producer. Finally, the vast majority of our second quarter revenue was generated from customers that were already working with us in the prior year. For the second quarter of 2015, our top one customer represented 12.3% of total revenue; top 5 customers represented 2.8%; and top 10 customers represented 47.7% of revenues compared to 10.1%, 29% and 44.8% of revenues respectively for the second quarter of 2014. The slight increase in concentration is due to the remarkable growth in our top one account, Disney which is hiring so additional process in new divisions. We…

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Tien-tsin Huang of JPMorgan. Please go ahead.

Great, thanks. Good quarter here I guess just couple of questions Martín on the rolling out of the new studios and there has been a trend, but can you remind us what sort of drives the formal decision to go ahead and launch the new studio, do you have sort of strategic account interest where you think you have work to justify it and how do you sort of balance putting talent into that studio versus obviously keeping the right talent with some other older studios? Martín Migoya: Hello Tien-tsin, thank you very much for the question. Well it is very clear as we have been seeing from our customers that every industry is really looking into how artificial intelligence or machine intelligence or Cognitive Computing intelligence we ended up calling it. Everybody is wondering how those industries can help those new technologies. So we have been trying them, we’ve introducing those technologies for many years already, but never thought them into a new studio. So although it’s not a new practice for us, we decided to create like the new studio, the NCCL screens in the studios. In order to transmit the massage that we are really using those technologies to help our customers and dream better consumer experience to their consumers. So we are taking some talent because we are working on these kinds of projects from other studios and bringing them into this new studio and I think trying to reading the message that we would be investing in many different areas across artificial intelligence and machine learning and but not in a way that we don’t give result. I mean we are – few may know already that we are very rented to how we use that in specific cases with specific universes. So for example we are driving a kind of semantic banking application where we are using machine intelligences or natural language processing to understand how to interact with bank consumer on the mobile for bank or in – on a web app for bank. So that’s the kind of approach we want to transmit. In essence we will be investing in this space of knowledge a lot, we have done a lot in the past, but now it will be much more profound in our strategy of getting closer to our customers and consumers. I don’t know if that answer your question, but may be I lost or I miss the portion.

No, it does. [indiscernible] a big topic, so that’s good hear. So just I guess on the growth this quarter obviously good, tough comp. I am curious what’s the – so the outlook for your top client for the second half of the year anything we should consider I mean I guess mathematically, although it was 6 to 10 clients, it looks like it was down a little bit sequentially and note your tough comp year-over-year, but just curious if there is any call outs or anything unusual there. Thank you. Martín Migoya: No, no nothing unusual. It just the normal process of the customers thinking this – natural both ups and downs but relationship all relationships are extremely healthy in general.

Great and then sort of for your top clients just second half anything to consider? Martín Migoya: Top clients is really, really, really bested in the success of the project and rolling out the project into many other areas. The main project of the next generation experience and also we are investing it, we’re selling very few – we mentioned in former earning calls. We are selling to other divisions of places and into other places around that same account.

Okay.

So, no change in that.

That’s great. Thank you.

The next question comes from Ashwin Shirvaikar with Citi. Please go ahead.

Hi Martin, Hi, Alejandro, good quarter here. I guess my first question is sort of follow on to Tien-tsin there. As you look at growth of non-top 10 clients, have you even talk to you better served by maybe adding more forming capabilities in terms of sales as opposed to hunting and increasing that basis of clients any thoughts on the sales force and how they operate?

Yes, Ashwin. Before our addition long-term business to have, customers we can make $40 million each on those accounts. That’s our long-term vision, prepaid customers 40 million relative. So that’s the long-term pain for us on those other accounts that are not growing that fast or growing slower. We have like collection of different scenarios there are some cases very small companies that are not our targets, some other cases big companies that are going through difficult movement or difficult transition. Then there are some other companies that are small that are growing, which will never get to that $50 million or $40 million a year. So we are now changing a little bit although we keep on paying attention to the biggest account, we are we have decided to start you know like training like another force of people that we will be targeting those smaller accounts those not top 20 let’s say accounts and starting to pay attention in a different way in a more evolved way. So that’s the next big step I mean the first next big step was to concentrate on the accounts that we want for our future. Once we got that now we are going to the next step that is investing in all the other accounts, which some of them made be competitive into those big accounts but right now are not in a good moment or not growing as we would like. If I may ask you that Ashwin within those non-top accounts we also have a number of new logos that you know and I say it’s a typical pattern in terms of – for Globant, we start very small but those are accounts with great potential so that has happening for instance with a very large travel company, Airline company, the largest food producer in the world, a large company in the healthcare sector. Those are very small companies, but still not in the top 20 customers, but again they represent big opportunities in terms of size and scale in the future.

Those points make a lot of sense. In terms of just as you take sort of the – as you quoted Martin the more evolved approach to sales. Is that imply a higher SG&A cost to the specific investments you are making that we should contemplate in our model?

I think Ashwin let me take that one. This is Alejandro. I think definitely it’s going to be in absolute value, you are going to see an increase in SG&A more on the sales side and on the SG&A side. But definitely on a relative value I think we’ll keep diluting SG&A. I think we have set up the factor of the company so that we can rely in many shared services that we had set up across the company, we have preferred the company to be scalable. I think most of the marginal investments, it’s going to come on the sales side so in absolute value SG&A is going go on a relative value on together with the growth that we see in the top line you shouldn’t be that line increasing on the contrary it should be slightly decreasing.

Okay, understood. And then last question Clarice. Any traction or any incremental comments on how as you make more of your clients aware of the acquisitions – of its capabilities, could you share some commentary on the traction that you maybe seeing? Martín Migoya: In general Ashwin it’s very well received, our customers are all happy, many of them has to get specific needs and we are starting to ramp up some teams already in India that before maybe it could have been started in other location. So in the last week I think the offering is very well received by our customers and for us it is also – they are well received not just because of the location – it’s well received because of what they do and remember we are not in the game of traditional IPO sourcing, which now India is normally associated to that, we are in the game of creating digital journey for our customers, it’s in the agenda of every single CEO of every company around the world. I mean everybody is wondering how I contribute better than my consumers, how can I try better than, how we can create a journey for them which is really tuneless. And that’s the reason why also Clarice or Globant in India like we end up calling it Globant in India, it’s getting also traction because the guys there and they know how they are pretty aligned to that idea. So that’s how much I can say, but I don’t know if you have any other specific doubt there or I could think begin, I don’t know.

No, no, that was very useful. Thank you, thank you for the comments. And that was the sort of my last question. Thank you. Martín Migoya: Thank you very much.

Thank you, Ashwin.

The next question comes from Anil Doradla with William Blair. Please go ahead.

Hey guys, congrats on the continued strong results Martin and Alejandro. I had a couple of questions. So building up on the previous question on Cognitive Computing the studio, clearly there is a aspect of communicating to the clients that you are ready for prime time and you are going out with this. But can you give a little bit more color I know the previous gentlemen asked this question, but I’m coming back to it around design wins around Cognitive Computing you talked about I think little bit in the mobile banking space, but can you spend a minute or two talking about a little bit more color on some of the wins there?

Yes, sure. The studio has been created today, so I would talk about what we can be doing in the past with other customers. Let’s go back to the seamless experience that we need to provide to the consumer. So when you are providing – you are expecting to provide a seamless experience with consumer we are not talking anymore about just a single mobile application. We are talking about mobile application that needs to be totally integrated in the multichannel – many different applications in many different platforms, but the secret behind giving the customer a good consumer experience. There is nothing to do with the application itself rather it has do with which is the information that you are providing to that specific person which is relevant to his experience at that specific moment and in that specific place. So that has happened, we have been using many things around machine learning’s around artificial intelligence around different things. Gathering information in our Big Data studio and not just Big Data, but also fast data and that’s the reason that learned and extract knowledge from that data that are able to provide that context aware information that will end up providing a greater experience for consumers. So that is I would say the core of how we’ve been looking artificial intelligence within new one. Now we are taking out that and putting that in black and white for our customers. So this is again about fast data events that are happening at the ERPs or initial extension of our customers and those events should trigger behaviors on the applications that are being built behind it. So we are in the forefront – of the totally different consumer experience that will be lead by artificial intelligence, but used in a…

Great. Now when you look at the attrition and can you give some color on say the attrition in your top five or 10 accounts versus the rest of the accounts. Is there some material difference in the attrition levels or it’s pretty much consistent across your whole account base?

Let me take that Anil, this is Alejandro. I think attrition it happened all across the board in the same level, we mentioned several times the attrition and concentrating on that lower base of the preeminent that has bee the case over the part of time it is the same case across the board, there are some of the accounts, some of the largest accounts where attrition is a little bit lower based on the attractiveness of the projects, that might be the case of Disney our largest customer where attrition is very low. But again I think we tried to keep focused on our plan to lower attrition. We have these capital lot of – the reason of our level of attrition having low level of attrition is bad, having a high level of attrition is also bad. So we try to stand in the middle, we have been running at the low 20s for quite sometime, we have been able to reduce that by almost 200 basis points over this last quarter. I think that’s paying off in terms of the strategy that we set up, different organization combined with large in the base of the pyramid competitive compensation and also [indiscernible]. So, I think we do have our plan to lower accretion and definitely attrition happens at the same level or across the board with the different accounts.

Great. When I look at your ability to hire the top notch talent from colleges and universities I have been busier day one preferences. Can you walk us through, and now that you’ve got Clarice and the acquisition and presence in India. So you are going to be competing with a lot of other folks in the space. How do you see yourselves may be not now but a path towards kind of day one, day zero kind of hiring preferences in the colleges and universities? Martín Migoya: Thank you, for the question. I think it triggers many opportunities for us to explain why we are different, when we offer the jobs and we attracted talents that we are recruiting these days. What you need to have in mind is that every single project that we are doing at Globant is really amazing, with some of the best customers in the planet, with some of the best possible projects, in the consumer facing states which is an absolutely new frontier for things and were things are happening. So that’s the value proposition we have again you know trying to optimize the corporate process, for implementing advanced ERP or implementing business processing, outsourcing practice or you know trying to do any kind of other work which is of course very profitable it’s great, it’s fine. But you when we are in front of the candidate and we explain that this is part, this is the dream, this is what we want to create, this is how we want to change the last, the life of our consumers, or the consumers, of the process we do, they’re absolutely fairly low with our proposal. So I don’t see any major hurdle on that aspect, because of that specific and differential value proposition that we have. And I think in India we have a huge opportunity too. In India it’s a place where traditionalize the players are really the dominant players there and you know just very small portion of what they do is what we do. So that’s one more reason to understand why in India, not just in America now, in India we can be successful with the attraction of talent and recruiting as many people as we want or as we need. I hope that answers your question.

Yes, definitely Martin and thanks a lot and congrats and best of luck.

Thank you. Martín Migoya: Thank you very much, Anil.

The next question comes from Jason Kupferberg with Jefferies. Please go ahead.

Thanks guys. I just wanted to ask a question about Europe I know it’s obviously a small geography for you guys today, but over the longer-term periods what sort of market opportunity you see there in terms of your ability to penetrate because it does seem like a lot of European enterprises in general are becoming more open to outsourcing and obviously your services are in the sweet spot? Martín Migoya: Jason, thank you very much for your question. Listen Europe for us is very important, you are not only the first customer we had in Q3 was in London. So for us Europe is important. We haven’t being performing or grow in the new ways, I think we didn’t have the right time that we make these changes there. We didn’t have the right team to do so, but as a caveat will we have one of the largest customers that we have announced, we cannot spot all the names, but imagine as I said in my tweet the largest health and food company in very small country in Europe. I cannot tell the name, but we should make much of it. We are engaging with them and exactly what we were – I was explaining around how to change consumer experience with that a specific brand. So things are starting to happen again in the Europe and as you said I totally agree with you. We have a huge opportunity given that pretty much every company in Europe we need to finish those new branches, consumers, technology versus consumer we think that sort of priced that. So all in all not happy with how we are performing in Europe however we are making changes and we are making it better for the future of Globant I think.

If I may add to that Jason I think also Europe was not our primary target for quite some time , we talk you some time, we dedicated more so far at qualified resources to U.S. and now I think it is the time where we do have the skill to have also focusing Europe as marketing stuff, it’s the great opportunity for us [indiscernible] definitely the market is there, the value proposition that we can definitely fund to European customers. So that when you will see and you will see it fro us in terms of Europe because that – that’s makes the aerial focus for us in terms of our value proposition and the digital we provide.

Okay, well stay tuned on that. And then just turning to the guidance for the year now at 25% revenue growth at the midpoint. How much of that should we think as coming from pricing, what are the pricing trends are you enjoying some pricing power just given the differentiation in your service offerings?

We do see pricing power especially in the new deals I mean tied up and lean to what Martin say in terms of providing customer with the seamless experience and trying to digitalize the experiences of their customers, we create software development. Those deals are definitely coming at a better rate. I would say a little bit that maybe pricing empowerment it’s slight upward trend. I will say it’s pretty much the organic growth coming from new deals and new process with existing customers 85% of our revenue stream comes from existing customer that’s the big chuck of the guidance and increasing the guidance.

And you have another they don’t think you – see of us historically we have been delivering an increase in the revenue at the end of the day its an increase on the price that we are charging either know if you have the exact number right here to provide, but how historically that progression.

Okay we will follow up on that Jason.

Oh that’s my problem. And then just lastly any detail you have on were cash flow came out for the quarter operating or free cash flow.

Yes, I think probably its worked talking about the cash flow for the first half. The next operating cash flow was $5 million for per cost. We also have CapEx of $8 million pretty much all the CapEx is related to the expansion – big expansion in Mexico, big expansion in Columbia and then the free cash flow if we include the bonds there the free cash flow conversion was 37% for the first half of the year. So its pretty much a line so the free cash flow conversion that we have a lot fear 37% including the bonds.

Okay thank you.

Thank you. Martín Migoya: Thank you. End of Q&A

This concludes our question-and-answer session. I would like to turn the conference back over to Martín Migoya for any closing remarks. Martín Migoya: Okay thank you very much operator. Okay so thank you very much for participating on the call. We are very happy with the results that we go this quarter and with the guidance and they are providing for the next quarter too and looking forward to see you in the next earnings call. Thank you very much for you help and support as always.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.