Martin Migoya
Martin Migoya founded Globant with his 3 friends in 2003 in Buenos Aires. Today all founders have managerial roles within the company and Martin acts as CEO. Thanks to his strong visionary mindset, Martin managed to drive the company from an Argentinian start up towards a global leader. Today the company is present in 18 countries and has 19,400 employees. Martin graduated from La Plata University in Electronic Engineering and holds a Master degree in Business Administration from CEMA University. He used to lecture on the subject of innovation in renowned US universities such as Harvard or Yale
Globant is an IT service provider specialized in digital and cognitive solutions.
The company services clients across various industries (from amusement parcs to industrial robots or metropolitan police) and generates 2/3 of its revenue from the US and Europe (cf chart on the left). Over the last 12 months, Globant crossed the $1bn revenue mark, growing 26% CAGR since 2014. Recently growth rate has accelerated towards the 30% mark, which may sustain in the near term. Covid-19 pandemic has accelerated the digitalization of businesses and hence the IT spending growth, as shown on the chart below. As per IDC, in 2022 over 60% of global GDP is to be digitalized.
As a throwback, Globant first international breakthrough occurred in 2006 when it signed a contract with Google.
Back then, the company strong of 350 employees managed to surprise Palo Alto giant with innovative solutions while testing their new e-commerce platform. Ever since, Google has remained a key customer of Globant. Number one customer is however Disney, which has consistently accounted for 12% of sales for several years. Globant started by offering IT solution for Disneyland and has evolved into a partner for Disney filmmaking. This highlights the company ability to grow existing customers by offering new innovative solutions. In 2Q21, revenue generated with Disney grew 11% sequentially. Overall 88% of revenue come from existing customers and the number of clients with over $10M revenue increased from 13 to 18 in 2Q21 yoy.
To cope with such growth, Globant has accelerated hirings.
The company grew from 1k employees in 2010 to close to 20k today. In 2021 it has been adding 1.5-2,000 people every quarter. 
The employee base has diversified from 70% Argentina based in 2014 to 26% Argentina / 23% Colombia / 30% other Latam and 13% India today. US and Europe only represent 8% of the employee base but the company is looking to add talents in Eastern Europe. Focusing in high value-added IT segment, Globant focuses on top 10% talents and hence the cost pressure is less striking as in other IT service companies. As of 2Q21, it generated $68,000 revenue per IT professional (vs. $100,000 for Accenture) with an average cost of $38-40,000 per employee.
In terms of profitability, the company generates 38-40% GPM. However as per management their focus is to increase software type solutions where GPM averages 70%. The company is expected to grow its earnings at 26% CAGR over the next 3 years with upside potential. The valuation reflects its high growth profile. The stock trades with an 2022 EV/EBITDA of 38x and 2022 PER of 66x. Our position in the company weights 1.5% of GemEquity.
