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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 20-F
 
(Mark One)
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Date of event requiring this shell company report
 For the transition period from                                      to                                     .
 
Commission file number: 001-36535


 GLOBANT S.A.
(Exact name of Registrant as specified in its charter)
Not applicable
(Translation of Registrant's name into English)
Grand Duchy of Luxembourg
(Jurisdiction of incorporation or organization)
 
37A Avenue J.F. Kennedy
L-1855, Luxembourg
Tel: + 352 20 30 15 96
(Address of principal executive offices)
Patricio Pablo Rojo
General Counsel
37A Avenue J.F. Kennedy
L-1855, Luxembourg
pablo.rojo@globant.com
+ 352 20 30 15 96
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)


Securities registered or to be registered pursuant to Section 12(b) of the Act. 
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common shares, nominal value $ 1.20 per shareGLOBNew York Stock Exchange




Securities registered or to be registered pursuant to Section 12(g) of the Act.

None
 
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
 
None
 
Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: 43,086,282 common shares.
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes  No
 
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.   Yes ☒  No
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  ☒  Yes  No
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒  Yes  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer 
Non-accelerated filer 
Emerging growth company
    
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
 
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
 
U.S. GAAP  International Financial Reporting Standards as issued by the International Accounting Standards Board ☒
 Other 
 
If "Other" has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow.   Item 17   Item 18
 




If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No






TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 




 
 
 
 
 




CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
 
This annual report includes forward-looking statements. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts contained in this annual report, including, without limitation, those regarding our future financial position and results of operations, strategy, plans, objectives, goals and targets, future developments in the markets in which we operate or are seeking to operate or anticipated regulatory changes in the markets in which we operate or intend to operate. In some cases, you can identify forward-looking statements by terminology such as "aim", "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "guidance", "intend", "may", "plan", "potential", "predict", "projected", "should" or "will" or the negative of such terms or other comparable terminology.
 
You should carefully consider all the information in this annual report, including the information set forth under "Risk Factors." We believe our primary challenges are:

If we are unable to maintain the current resource utilization rates and productivity levels, our revenues, profit margins and results of operations may be adversely affected.
If we are unable to manage attrition and attract and retain highly-skilled IT professionals, our operating efficiency and productivity may decrease, and we may not have the necessary resources to maintain client relationships and expand our business.
If we are unable to achieve anticipated growth, our revenues, results of operations, business and prospects may be adversely affected.
If we are unable to effectively manage the rapid growth of our business, our management personnel, systems and resources could face significant strains, which could adversely affect our results of operations.
If the pricing structures we use for our client contracts are based on inaccurate expectations and assumptions regarding the cost and complexity of performing our work, our contracts could be unprofitable, which could adversely affect our results of operations, financial condition and cash flows from operations.
If we were to lose the services of our senior management team or other key employees, our business operations, competitive position, client relationships, revenues and results of operations may be adversely affected.
If we do not continue to innovate and remain at the forefront of emerging technologies and related market trends, we may lose clients and not remain competitive, which could cause our revenues and results of operations to suffer.
We are subject to numerous risks associated with the evolving market for products with AI capabilities.
If any of our largest clients terminates, decreases the scope of, or fails to renew its business relationship or short-term contract with us, our revenues, business and results of operations may be adversely affected.
Our results of operations could be adversely affected by economic and political conditions globally and, in particular, in the markets in which we operate.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance and are based on numerous assumptions. Our actual results of operations, financial condition and the development of events may differ materially from (and be more negative than) those made in, or suggested by, the forward-looking statements. Readers should read "Risk Factors" in this annual report and the description of our business under "Business Overview" in this annual report for a more complete discussion of the factors that could affect us.

Unless required by law, we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or developments or otherwise.

CURRENCY PRESENTATION AND DEFINITIONS

In this annual report, references to “Globant”, “we”, “our”, “us” or the “Company” means Globant S.A. and its consolidated subsidiaries, unless the context otherwise requires, or where we make clear that such term refers only to Globant S.A. and not to its subsidiaries.

In this annual report references to currencies are defined in the following table:
"U.S. dollars" and "$"refer to the lawful currency of the United States
"Argentine pesos"refers to the lawful currency of the Republic of Argentina
"Colombian pesos"refers to the lawful currency of the Republic of Colombia
"Uruguayan pesos"refers to the lawful currency of the Republic of Uruguay
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"Mexican pesos"refers to the lawful currency of Mexico
"Chilean pesos"refers to the lawful currency of Chile
"Rupees" or "Indian rupees"refer to the lawful currency of the Republic of India
"Reais" or "Brazilian Real"refer to the lawful currency of Brazil
"Peruvian Sol"refers to the lawful currency of Peru
"Euro" or "€"refer to the single currency of the participating member states of the European and Monetary Union of the Treaty Establishing the European Community, as amended from time to time
"Pound", "British Sterling pound" or "£"refer to the lawful currency of the United Kingdom
"Canadian dollars"refers to the lawful currency of Canada
"Saudi Riyal"refers to the lawful currency of the Kingdom of Saudi Arabia
"Australian dollars"refers to the lawful currency of the Commonwealth of Australia
"Danish Krone"refers to the lawful currency of Denmark
 
Unless otherwise specified or the context requires otherwise in this annual report:
 
"IT" refers to information technology;
"ISO" means the International Organization for Standardization, which develops and publishes international standards in a variety of technologies and in the IT services sector;
"Attrition rate," during a specific period, refers to the ratio of IT professionals that voluntarily left our company during the period to the number of IT professionals that were on our payroll on the last day of the period; and
"Globers" refers to the employees that work for Globant.

"GLOBANT" and its logo are our trademarks. Solely for convenience, we refer to our trademarks in this annual report without the TM and ® symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to our trademarks. Other service marks, trademarks and trade names referred to in this annual report are the property of their respective owners.

PRESENTATION OF FINANCIAL INFORMATION
 
Our consolidated financial statements are prepared under IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and presented in U.S. dollars. Our fiscal year ends on December 31 of each year. Accordingly, unless otherwise indicated, all references to a particular year are to the year ended December 31 of that year.

Some percentages and amounts included in this annual report have been rounded for ease of presentation. Accordingly, figures shown as totals in certain tables may not be an exact arithmetic aggregation of the figures that precede them.

Unless otherwise indicated or the context requires otherwise, all financial information in this annual report is presented in U.S. dollars.
 
PRESENTATION OF INDUSTRY AND MARKET DATA
 
In this annual report, we rely on, and refer to, information regarding our business and the markets in which we operate and compete. The market data and certain economic and industry data and forecasts used in this annual report were obtained from International Data Corporation (“IDC”), Gartner, Inc. (“Gartner”), Forrester Research, Inc. and/or one of its affiliates (collectively, “Forrester”), internal surveys, market research, governmental and other publicly available information, independent industry publications and reports prepared by industry consultants. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. We believe that these industry publications, surveys and forecasts are reliable, but we have not independently verified them and cannot guarantee their accuracy or completeness.  

Certain market share information and other statements presented herein regarding our position relative to our competitors are not based on published statistical data or information obtained from independent third parties, but reflect our best estimates. We have based these estimates upon information obtained from our clients, trade and business organizations and associations and other contacts in the industries in which we operate.
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PART I.
 
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.
 
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION
 
A. [Reserved]
 
B. Capitalization and Indebtedness
 
Not applicable.
 
C. Reasons for the Offer and Use of Proceeds
 
Not applicable.
 
D. Risk Factors
 
Summary Risk Factors

The following summarizes the principal factors that make an investment in our company speculative or risky, all of which are more fully described in the Risk Factors below. This summary should be read in conjunction with the Risk Factors below and should not be relied upon as an exhaustive summary of the material risks facing our business. The following factors could result in harm to our business, reputation, revenue, financial results and prospects, among other impacts:

Risks Related to Our Business and Industry

If we are unable to maintain the current resource utilization rates and productivity levels, our revenues, profit margins and results of operations may be adversely affected.
If we are unable to manage attrition and attract and retain highly-skilled IT professionals, our operating efficiency and productivity may decrease, and we may not have the necessary resources to maintain client relationships and expand our business.
If we are unable to achieve anticipated growth, our revenues, results of operations, business and prospects may be adversely affected.
If we are unable to effectively manage the rapid growth of our business, our management personnel, systems and resources could face significant strains, which could adversely affect our results of operations.
If the pricing structures we use for our client contracts are based on inaccurate expectations and assumptions regarding the cost and complexity of performing our work, our contracts could be unprofitable, which could adversely affect our results of operations, financial condition and cash flows from operations.
If we were to lose the services of our senior management team or other key employees, our business operations, competitive position, client relationships, revenues and results of operations may be adversely affected.
If we do not continue to innovate and remain at the forefront of emerging technologies and related market trends, we may lose clients and not remain competitive, which could cause our revenues and results of operations to suffer.
If any of our largest clients terminates, decreases the scope of, or fails to renew its business relationship or short-term contract with us, our revenues, business and results of operations may be adversely affected.
We are subject to numerous risks associated with the evolving market for products with AI capabilities.
We face intense competition from technology and IT services providers, and an increase in competition, our inability to compete successfully, pricing pressures or loss of market share could materially adversely affect our revenues, results of operations and financial condition.
Our business depends on a strong brand and corporate reputation, and if we are not able to maintain and enhance our brand, our ability to expand our client base will be impaired and our business and operating results will be adversely affected.
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Our labor costs and the operating restrictions that apply to us could increase as a result of collective bargaining negotiations and changes in labor laws and regulations, and disputes resulting in work stoppages, strikes, or disruptions could adversely affect our business.
Our aspirations and disclosures related to environmental, social and governance (“ESG”) matters expose us to risks that could adversely affect our reputation and performance.
Regulations and stakeholder expectations relating to ESG matters may impose additional costs and expose us to new risks.

Risks Related to our Global Operations

Our results of operations could be adversely affected by economic and political conditions globally and, in particular, in the markets in which we operate.
The governments of many countries in which we operate have exercised and may continue to exercise significant influence over those countries' economies, which could adversely affect our business, financial condition, results of operations and prospects.
Inflation in the countries in which we operate could adversely affect our business and results of operations.
Our business, results of operations and financial condition may be adversely affected by fluctuations in currency exchange rates.
Changes in the tax laws or in the interpretation or enforcement or the loss of any country-specific tax benefits could have a material adverse effect on our financial condition and results of operations.
Our business, results of operations and financial condition may be adversely affected by the various conflicting and/or onerous legal and regulatory obligations required in the countries where we operate.

Risks Related to the Company and the Ownership of Our Common Shares

The price of our common shares may be highly volatile.
We may be classified by the Internal Revenue Service as a "passive foreign investment company" (a "PFIC"), which may result in adverse tax consequences for U.S. investors.
Our business and results of operations may be adversely affected by the increased strain on our resources from complying with the reporting, disclosure, and other requirements applicable to public companies in the United States.

You should carefully consider the risks and uncertainties described below, together with the other information contained in this annual report, before making any investment decision. Any of the following risks and uncertainties could have a material adverse effect on our business, prospects, results of operations, margins and financial condition. The market price of our common shares could decline due to any of these risks and uncertainties, and you could lose all or part of your investment. The risks described below are those that we currently believe may materially affect us.

Risks Related to Our Business and Industry

If we are unable to maintain the current resource utilization rates and productivity levels, our revenues, profit margins and results of operations may be adversely affected.
 
Our profitability and the cost of providing our services are affected by our utilization rate of the Globers in our Studios. If we are not able to maintain appropriate utilization rates for our professionals, our profit margin and our profitability may suffer. Our utilization rates are affected by a number of factors, including: 

our ability to transition Globers from completed projects to new assignments and to hire and integrate new employees;
our ability to forecast demand for our services and thereby maintain an appropriate headcount in each of our talent delivery centers;
our ability to manage the attrition of our IT professionals;
our need to devote time and resources to training, professional development and other activities that cannot be billed to our clients; and
our ability to win new engagements from credit worthy clients.

Our revenue could also suffer if we misjudge demand patterns and do not recruit sufficient employees to satisfy demand. Employee shortages could prevent us from completing our contractual commitments in a timely manner and cause us to pay penalties or lose contracts or clients. In addition, we could incur increased payroll costs, which would negatively affect our utilization rates and our business.
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If we are unable to manage attrition and attract and retain highly-skilled IT professionals, our operating efficiency and productivity may decrease, and we may not have the necessary resources to maintain client relationships and expand our business.
 
Our business is labor intensive and, accordingly, our success depends upon our ability to attract, develop, motivate, retain and effectively utilize highly-skilled IT professionals. We believe that there is significant competition for technology professionals who possess the technical skills and experience necessary to deliver our services, and that such competition is likely to continue for the foreseeable future. In addition, the accelerated adoption of remote and hybrid working models may increase outsourcing and the number of jobs that can be conducted virtually which, in turn, may further enhance competition for highly-qualified professionals. As a result, the technology industry generally experiences a significant rate of turnover of its workforce. Our business plan is based on hiring and training a significant number of additional technology professionals each year in order to meet anticipated turnover and increased staffing needs. Our ability to properly staff projects, maintain and renew existing engagements and win new business depends, in large part, on our ability to hire and retain qualified IT professionals.
 
The total attrition rate among our Globers was 8.1%, 16.7% and 18.7% for the years ended December 31, 2023, 2022 and 2021, respectively. If our attrition rate were to increase above historical levels, our operating efficiency and productivity may decrease. We compete for talented individuals, not only with other companies in our industry, but also with companies in other industries, such as software services, engineering services and financial services companies, among others, and there is a limited pool of individuals who have the skills and training necessary to help us grow our company. High attrition rates of qualified personnel could have an adverse effect on our ability to expand our business, as well as cause us to incur greater personnel expenses and training costs.

We may not be able to recruit and train a sufficient number of qualified professionals or be successful in retaining current or future employees. Increased hiring by technology companies and increasing worldwide competition for skilled technology professionals may lead to a shortage in the availability of qualified personnel in the locations where we operate and hire. Failure to hire and train or retain qualified technology professionals in sufficient numbers could have a material adverse effect on our business, results of operations and financial condition.

If we are unable to achieve anticipated growth, our revenues, results of operations, business and prospects may be adversely affected.

We intend to continue our expansion in the foreseeable future and to pursue existing and potential market opportunities. As we add new Studios, introduce new services or enter into new markets, we may face new market, technological and operational risks and challenges with which we are unfamiliar, and we may not be able to mitigate these risks and challenges to successfully grow those services or markets.

We have experienced rapid revenue growth in the past, including years of highly elevated growth rates, that may not be replicable in the future due to a number of factors, including global macroeconomic conditions. You should not consider our revenue growth in recent periods as indicative of our future performance. We may not be able to achieve revenue growth consistent with our recent history or at all, which could materially adversely affect our revenues, results of operations, business and prospects.

If we are unable to effectively manage the rapid growth of our business, our management personnel, systems and resources could face significant strains, which could adversely affect our results of operations.

We have experienced, and continue to experience, rapid growth in our headcount, operations and revenues, which has placed, and will continue to place, significant demands on our management and operational and financial infrastructure. Additionally, our decentralized staffing and the increasing number of employees that are deployed onsite at our clients or near client locations have placed additional operational and structural demands on our resources.

Our future growth depends on recruiting, hiring and training technology professionals, growing our international operations, expanding our delivery capabilities, adding effective sales staff and management personnel, adding service offerings, maintaining existing clients and winning new business. Client demands, the availability of high-quality technical and operational personnel and their respective compensation rates, regulatory environments and other pertinent factors may vary significantly by region, and our experience in the markets in which we currently operate may not be applicable to other regions. As a result, we may not be able to leverage our experience to expand our delivery footprint effectively into other target markets. In addition, as we expand into new markets and expand our service offerings, we may face new risks and challenges with which we may not be familiar and which we may not be able to mitigate.
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Effective management of these and other growth initiatives will require us to continue to improve our infrastructure, execution standards and ability to expand services. Failure to manage growth effectively could have a material adverse effect on the quality of the execution of our engagements, our ability to attract and retain professionals and our business, results of operations, prospects and financial condition.

If the pricing structures we use for our client contracts are based on inaccurate expectations and assumptions regarding the cost and complexity of performing our work, our contracts could be unprofitable, which could adversely affect our results of operations, financial condition and cash flows from operations.
 
We perform our services primarily under time-and-materials contracts. We charge clients for our services under these contracts at hourly rates, which are highly dependent on the complexity of the project, the mix of staffing we anticipate using on it, internal forecasts of our operating costs and predictions of increases in those costs influenced by wage inflation and other marketplace factors. Typically, we do not have the ability to increase our hourly rates to offset salary and other costs increases. Because we conduct a substantial part of our operations through our operating subsidiaries located in Argentina, Colombia, México and India, we are subject to the effects of wage inflation and other marketplace factors in these countries, which have increased significantly in recent years.

We also undertake engagements on a fixed-price basis, which require the estimation of the associated costs to complete the project. Revenues from our fixed-price contracts represented 18.3%, 15.4% and 16.9% of our total revenues for the years ended December 31, 2023, 2022 and 2021, respectively.

Our pricing depends on our assumptions and forecasts about the costs we will incur to render our services or complete the related project, which are based on limited data which could turn out to be inaccurate. We also rely, to a limited extent, on suppliers of goods and services. We cannot assure that our suppliers' pricing terms will not increase and/or that we will be able to carry-forward such pricing increases to our clients.

Unexpected increases in salaries and other operating costs beyond our forecasts, which we are not able to carry-forward to our clients, or any failure by us to accurately estimate the costs of our hourly services, the resources and time required to complete a fixed-price contract on time and on budget, any failure to complete the project or meet our client's expectations, or any unforeseen changes in the project's scope, among others, could make our contracts unprofitable, thereby adversely affecting our results of operations, financial condition and cash flows from operations.

If we were to lose the services of our senior management team or other key employees, our business operations, competitive position, client relationships, revenues and results of operations may be adversely affected.
 
Our future success heavily depends upon the continued services of our senior management team and other key employees. If one or more of our senior executives or key employees are unable or unwilling to continue in their present positions, it could disrupt our business operations, and we may not be able to replace them easily, on a timely basis or at all. In addition, competition for senior executives and key employees in our industry is intense. Our compensation policies include equity-based incentive compensation plans that are designed to reward high-performing personnel for their contributions and provide incentives for them to remain with us. If the anticipated value of such incentives does not materialize because of volatility or lack of positive performance in our share price, or if our total compensation package is not viewed as being competitive, we may be unable to retain our senior executives and key employees or attract and retain new senior executives and key employees in the future, in which case our business may be severely disrupted, and our ability to attract and retain personnel could be adversely affected.
 
If any of our senior management team or key employees joins a competitor or forms a competing company, we may lose clients, suppliers, know-how and key IT professionals and staff members to them. Also, if any of our sales executives or other sales personnel, who generally maintain a close relationship with our clients, joins a competitor or forms a competing company, we may lose clients to that company, and our revenues may be materially adversely affected. Additionally, there could be unauthorized disclosure or use of our technical knowledge, practices or procedures by such personnel. If any dispute arises between any members of our senior management team or key employees and us, any non-competition, non-solicitation and nondisclosure agreements we have with our founders, senior executives or key employees might not provide effective protection to us in light of legal uncertainties associated with the enforceability of such agreements.

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If we do not continue to innovate and remain at the forefront of emerging technologies and related market trends, we may lose clients and not remain competitive, which could cause our revenues and results of operations to suffer.
 
Technological advances and innovation are constant in the technology services industry. As a result, we must continue to invest significant resources in research and development to stay abreast of technology developments so that we may continue to deliver software products that our clients will wish to purchase. If we are unable to anticipate technology developments, enhance our existing services or develop and introduce new services to keep pace with such changes and meet changing client needs, we may lose clients and our revenues and results of operations could suffer. Our results of operations would also suffer if our innovations are not responsive to the needs of our clients, are not appropriately timed with market opportunities or are not effectively brought to market. Our competitors may be able to offer engineering, design and innovation services that are, or that are perceived to be, substantially similar or better than those we offer. This may force us to compete on other fronts in addition to the quality of our services and to expend significant resources in order to remain competitive, which we may be unable to do. As we expand our software products, we may be exposed to new operational, legal, regulatory, ethical and technological risks that require us to take effective actions to protect our business.

We are subject to numerous risks associated with the evolving market for products with AI capabilities.

The markets and use cases for products with artificial intelligence (“AI”) capabilities have been rapidly evolving, are difficult to predict and may impact demand for our products and services. We use AI and machine learning (“ML”) in our products and services, including Augoor, MagnifAI, GeneXus, GeneXus Enterprise AI, Navigate, StarmeUp, Walmeric and FluentLab. These platforms are encompassed in our Globant X division and are based on Globant’s own proprietary AI models, but also leverage third-party models such as OpenAI’s GPT-4, and Google’s Gemma and NVIDIA's AI Enterprise platform. Also, we use AI assistants in some of our internal processes. For example, "Geno," a tool to optimize staffing and talent management processes, and "Sensei," a system that offers tailored learning and career development experiences, are proprietary developments that leverage OpenAI’s GPT models. The significant investments we have made to develop products to address what we believe will be increasing demand for AI capabilities may be insufficient, and we face significant hurdles, including whether demand will materialize, whether third-party developers will develop the software to utilize the AI capabilities of our products, and whether we will be successful in developing products that can compete with offerings by established competitors.

Our use of AI technology may subject us to reputational, financial, legal or regulatory risks. As we incorporate AI technology into our products and services, any failure to address concerns relating to the responsible use of the evolving AI technology in our products and services may cause harm to our reputation or financial liability and, as such, may increase our costs to address or mitigate such risks and issues. AI technology may create ethical issues, generate defective algorithms, and present other risks that create challenges with respect to its adoption. In addition, evolving rules, regulations, and industry standards governing AI may require us to expend significant resources to modify, maintain, or align our business practices or products to comply with US and non-US rules and regulations, the nature of which cannot be determined at this time. Several jurisdictions around the globe, including the EU and certain US states, have already proposed or enacted laws governing AI. US federal agencies are likely to release AI regulations in the near future in light of the Biden administration’s October 30, 2023 Executive Order on AI. The regulatory environment surrounding the impact of the implementation of AI on our products and services may adversely affect our ability to produce and export products and as a result may cause harm to our reputation and financial liability.

If any of our largest clients terminates, decreases the scope of, or fails to renew its business relationship or short-term contract with us, our revenues, business and results of operations may be adversely affected.
 
We generate a significant portion of our revenues from our ten largest clients. During the years ended December 31, 2023, 2022 and 2021, our largest customer based on revenues, The Walt Disney Company, accounted for 8.7%, 10.7% and 10.9% of our revenues, respectively. During the years ended December 31, 2023, 2022 and 2021, our ten largest clients accounted for 32.0%, 35.6% and 39.1% of our revenues, respectively. 

Our ability to maintain close relationships with these and other major clients is essential to the growth and profitability of our business. However, most of our client contracts are limited to short-term, discrete projects without any commitment to a specific volume of business or future work, and the volume of work performed for a specific client is likely to vary from year to year, especially since we are generally not our clients' exclusive technology services provider. A major client in one year may not provide the same level of revenues for us in any subsequent year. The technology services we provide to our clients, and the revenues and income from those services, may decline or vary as the type and quantity of technology services we provide changes over time. In addition, our reliance on any individual client for a significant portion of our revenues may give that client a certain degree of pricing leverage against us when negotiating contracts and terms of service.

The loss or diminution in business from any of our major clients could have a material adverse effect on our revenues and results of operations.
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We face intense competition from technology and IT services providers, and an increase in competition, our inability to compete successfully, pricing pressures or loss of market share could materially adversely affect our revenues, results of operations and financial condition.  

The market for technology and IT services is intensely competitive, highly fragmented and subject to rapid change and evolving industry standards and we expect competition to intensify. We believe that the principal competitive factors that we face are the ability to innovate; technical expertise and industry knowledge; end-to-end solution offerings; reputation and track record for high-quality and on-time delivery of work; effective employee recruiting; training and retention; responsiveness to clients' business needs; scale; financial stability; and price.
 
We face competition primarily from large global consulting and outsourcing firms, digital agencies and design firms, traditional technology outsourcing providers, and the in-house product development departments of our clients and potential clients. Many of our competitors have substantially greater financial, technical and marketing resources and greater name recognition than we do. As a result, they may be able to compete more aggressively on pricing or devote greater resources to the development and promotion of technology and IT services. Companies based in some emerging markets also present significant price competition due to their competitive cost structures and tax advantages. 

In addition, we expect to continue to face, competition from new technology services providers. Further, there is a risk that our clients may elect to increase their internal resources to satisfy their services needs as opposed to relying on a third-party vendor, such as our company. The technology services industry is also undergoing consolidation, which may result in increased competition in our largest target markets in the United States and Europe from larger firms that may have substantially greater financial, marketing or technical resources, may be able to respond more quickly to new technologies or processes and changes in client demands, and may be able to devote greater resources to the development, promotion and sale of their services than we can. Increased competition could also result in price reductions, reduced operating margins and loss of our market share. We cannot assure you that we will be able to compete successfully with existing or new competitors or that competitive pressures will not materially adversely affect our business, results of operations and financial condition.
 
Our business depends on a strong brand and corporate reputation, and if we are not able to maintain and enhance our brand, our ability to expand our client base will be impaired and our business and operating results will be adversely affected.
 
Since many of our specific client engagements involve highly tailored solutions, our corporate reputation is a significant factor in our clients' and prospective clients' determination of whether to engage us. We believe the Globant brand name and our reputation are important corporate assets that help distinguish our services from those of our competitors and also contribute to our efforts to recruit and retain talented IT professionals. However, our corporate reputation is susceptible to damage by actions or statements made by current or former employees or clients, competitors, vendors, adversaries in legal proceedings and government regulators, as well as members of the investment community and the media. There is a risk that negative information about our company, even if based on false rumor or misunderstanding, could adversely affect our business. In particular, damage to our reputation could be difficult and time-consuming to repair, make potential or existing clients reluctant to select us for new engagements, resulting in a loss of business, and adversely affect our recruitment and retention efforts. Damage to our reputation could also reduce the value and effectiveness of our Globant brand name and could reduce investor confidence in us and result in a decline in the price of our common shares.

Our labor costs and the operating restrictions that apply to us could increase as a result of collective bargaining negotiations and changes in labor laws and regulations, and disputes resulting in work stoppages, strikes, or disruptions could adversely affect our business.  
 
As of December 31, 2023, approximately 4% of our Globers are covered by Collective Bargaining Agreements ("CBAs"), including Globers from our Brazilian, French, Spanish and Italian subsidiaries, as well as some Globers from our Argentinean subsidiaries. For complete details of the covered employees see "Directors, Senior Management and Employees — Employees". There can be no assurance that our non-unionized employees will not become members of a union or become covered by a collective bargaining agreement, including through an acquisition of a business whose employees are subject to such an agreement.

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We cannot assure you that we or our operating subsidiaries will not experience work disruptions or stoppages in the future, which could have a material adverse effect on our business and revenues. In addition, we cannot assure you that we will be able to negotiate new CBAs on the same terms as those currently in effect, or that we will not be subject to strikes or work stoppages before or during the negotiation process. If we are unable to negotiate salary agreements or if we are subject to strikes or work stoppages, our results of operations, financial condition and the market value of our shares could be materially adversely affected.

Our aspirations and disclosures related to environmental, social and governance (“ESG”) matters expose us to risks that could adversely affect our reputation and performance.

We have established and publicly announced in our annual Integrated Report, our ESG goals, including our commitments to address climate change, human rights, social and digital inclusion, diversity and equity. These statements reflect our current plans and aspirations and are not guarantees that we will be able to achieve them. Our failure to adequately update, accomplish or accurately track and report on these goals on a timely basis, or at all, could adversely affect our reputation, financial performance and growth, and expose us to increased scrutiny from the investment community, special interest groups and enforcement authorities.

Our ability to achieve any ESG objective is subject to numerous risks, many of which are outside of our control. Examples of such risks include the availability and cost of low or non-carbon-based energy sources, the evolving regulatory requirements affecting product circularity, ESG standards or disclosures, the evolving consumer protection laws applicable to ESG matters and the availability of materials and suppliers that can meet our sustainability, diversity and other ESG goals.

Standards for tracking and reporting ESG matters continue to evolve. Our selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others. Methodologies for reporting ESG data may be updated and previously reported ESG data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations and other changes in circumstances. Our processes and controls for reporting ESG matters across our operations and supply chain are evolving along with multiple disparate standards for identifying, measuring, and reporting ESG metrics, including ESG-related disclosures that may be required by the SEC, European regulators and other regulators, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future. If our ESG practices do not meet evolving investor or other stakeholder expectations and standards, then our reputation or our attractiveness as an investment, business partner, acquirer, service provider or employer could be negatively impacted.

Regulations and stakeholder expectations relating to environmental, social and governance matters may impose additional costs and expose us to new risks.

We continue to closely monitor developments relating to ESG regulations. At the federal level, the SEC has proposed new rules requiring public companies to disclose extensive climate-related information in their registration statements and periodic reports. The proposed rules would mandate disclosures related to climate-related risks and their impacts, greenhouse gas emissions and climate-related financial statement metrics. In addition, California recently enacted Assembly Bill 1305 (“AB 1305”), the Climate Corporate Data Accountability Act (“SB 253”) and the Climate-Related Financial Risk Act (“SB 261”). As a company with operations in California, we may fall under the jurisdiction of these new laws, which impose rigorous reporting obligations regarding our climate-related financial risks and extensive requirements for the disclosure of greenhouse gas emissions. AB 1305, which became effective on January 1, 2024, creates new annual disclosure requirements regarding substantiation of certain climate-related statements. SB 253 will require covered companies with total annual revenues of $1 billion or more to disclose annually their Scope 1 (owned and controlled sources) and Scope 2 (energy purchased and used) greenhouse gas emissions beginning in 2026 (for 2025 data), and Scope 3 (up and down the value chain) greenhouse gas emissions beginning in 2027 (for 2026 data). SB 261 will require covered companies with total annual revenues of $500 million or more to publish biennial reports disclosing climate-related financial risks and the measures adopted to mitigate the disclosed risks by January 1, 2026. If we do not comply with the requirements of AB 1305, SB 261 or SB 253, we could be subject to fines of up to $500,000, $50,000 and $500,000, respectively, per year. As a result of new and proposed climate-related regulatory requirements, we must develop robust systems, processes, and controls for assessing and reporting our climate-related financial risks, as well as ensuring transparency and accuracy in our disclosures.

There is an increasing focus from stakeholders, including certain investors, customers and employees, concerning ESG matters. For example, some investors may use ESG performance factors to guide their investment strategies and, in some cases, may choose not to invest in us if they believe our policies and actions relating to ESG are inadequate. In addition, we may face reputational damage in the event that we do not meet the ESG standards set by various constituencies.

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As ESG best practices and regulations continue to evolve, we expect to incur increasing costs relating to ESG monitoring, reporting and compliance, and these efforts will require substantial time and attention of management. This could have a material adverse effect on our business, results of operations, value chain and financial condition.

Our revenues are dependent on a limited number of industries, and any decrease in demand for technology services in these industries could reduce our revenues and adversely affect our results of operations.
 
During the years ended December 31, 2023, 2022 and 2021, an aggregate of 40.1%, 41.3% and 44.8% of our total revenues were generated from clients in the media and entertainment, and banks, financial services and insurance industries. Our business growth largely depends on continued demand for our services from clients in these industries and other industries that we may target in the future, as well as on trends in these industries to purchase technology services or to move such services in-house.
 
A downturn in any of these or our targeted industries, or a slowdown or reversal of the trend to spend on technology services in any of these industries could result in a decrease in the demand for our services and materially adversely affect our revenues, financial condition and results of operations. For example, a worsening of economic conditions in the media and entertainment industry and significant consolidation in such industry may reduce the demand for our services and negatively affect our revenues and profitability.
 
Other developments in the industries in which we operate may also lead to a decline in the demand for our services, and we may not be able to successfully anticipate and prepare for any such changes. For example, consolidation in any of these industries or acquisitions, particularly involving our clients, may adversely affect our business. Our clients may experience rapid changes in their prospects, substantial price competition and pressure on their profitability. This, in turn, may result in increasing pressure on us from clients in these key industries to lower our prices, which could adversely affect our revenues, results of operations and financial condition.
 
We operate in a rapidly evolving industry, which makes it difficult to evaluate our future prospects, may increase the risk that we will not continue to be successful and, accordingly, increases the risk of your investment.
 
The technology services industry is continuously evolving. Competition, fueled by rapidly changing consumer demands and constant technological developments, renders the technology services industry one in which success and performance metrics are difficult to predict and measure. Because services and technologies are rapidly evolving and each company within the industry can vary greatly in terms of the services it provides, its business model, and its results of operations, it can be difficult to predict how many company's services, including ours, will be received in the market. While enterprises have been willing to devote significant resources to incorporate emerging technologies and related market trends into their business models, enterprises may not continue to spend any significant portion of their budgets on our services in the future. The increasing reliance on automation, AI, ML and other new technologies by our clients may reduce the demand for our services and adversely impact our results of operations. Neither our past financial performance nor the past financial performance of any other company in the technology services industry is indicative of how our company will fare financially in the future. Our future profits may vary substantially from those of other companies, and those we have achieved in the past, making investment in our company risky and speculative. If our clients' demand for our services declines, as a result of economic conditions, market factors or shifts in the technology industry, our business would suffer and our results of operations and financial condition would be adversely affected.
 
If we cause disruptions in our clients' businesses or provide inadequate services, our clients may have claims for substantial damages against us, which could cause us to lose clients, have a negative effect on our corporate reputation and adversely affect our results of operations.
 
If our Globers make errors in the course of delivering services to our clients or in the development of software solutions for our clients, or fail to consistently meet service requirements of a client, these errors, software defects or failures could disrupt the client's business, which could result in a reduction in our revenues or a claim for substantial damages against us. In addition, a failure or inability to meet a contractual requirement could seriously damage our corporate reputation and limit our ability to attract new business.
 
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The services we provide and the software solutions we develop are often critical to our clients' businesses. Certain of our client contracts require us to comply with security obligations including maintaining network security and backup data, ensuring our network is virus-free, maintaining business continuity planning procedures, and verifying the integrity of employees that work with our clients by conducting background checks. Any failure in a client's system or breach of security relating to the services we provide to the client could damage our reputation or result in a claim for substantial damages against us. Any significant failure of our equipment or systems, or any major disruption to basic infrastructure like power and telecommunications in the locations in which we operate, could impede our ability to provide services to our clients, have a negative impact on our reputation, cause us to lose clients, and adversely affect our results of operations.
 
Under our client contracts, our liability for breach of our obligations is, in some cases, limited pursuant to the terms of the contract. Such limitations may be unenforceable or otherwise may not protect us from liability for damages. In addition, certain liabilities, such as claims of third parties for which we may be required to indemnify our clients, may not be limited under our contracts.

If client damages are not limited under the terms of our contracts and are deemed recoverable against us in amounts in excess of our insurance coverage, or if our claims for insurance coverage are denied by our insurance carriers for any reason, there could be a material adverse effect on our business, results of operations and financial condition and/or our reputation, which could, in turn, have an adverse effect in our business, result of operations and financial condition.
 
We may face losses or reputational damage if our software solutions contain undetected software defects.
 
A significant amount of our business involves developing software solutions for our clients as part of our provision of technology services. We are required to make certain representations and warranties to our clients regarding the quality and functionality of our software. Any undetected software defects could result in liability to our clients under certain contracts as well as losses resulting from any litigation initiated by clients due to any losses sustained as a result of the defects. Any such liability or losses could have an adverse effect on our financial condition as well as on our reputation with our clients and in the technology services market generally.
 
Our client relationships, revenues, results of operations and financial condition may be adversely affected if we experience disruptions in our business.
 
Disruptions in telecommunications, system failures, internet infrastructure, computer virus attacks or other operational disruptions caused by factors outside of our control, such as hostilities, political unrest, terrorist attacks, natural disasters, and public health emergencies (including pandemics) could adversely impact our ability to deliver services to our clients, which could result in client dissatisfaction, harm to our reputation, and a loss of business and related reduction of our revenues. Our business continuity and disaster recovery plans may not be effective at preventing or mitigating the effects of such disruptions, and we may not be able to consistently maintain active voice and data communications between our various global operations and with our clients due to disruptions in telecommunication networks and power supply, system failures, computer virus attacks or other operational disruptions. Any significant failure in our ability to communicate could result in a disruption in business, which could hinder our performance and our ability to complete projects on time. Such failure to perform on client contracts could have a material adverse effect on our business, results of operations and financial condition. 

If our computer systems or data, or our service providers’ systems or data, are subject to security incidents or breaches, or if any of our employees misuses or misappropriates data, it may disrupt our operations, and we may face reputational damage, lose clients and revenues, or incur losses.
 
Our business is heavily dependent on the security of our IT networks and those of our clients, as well as our third-party providers. We have access to, and we collect, transmit and store data, including confidential client and client customer data, intellectual property, and personal data. Threats to network and data security are increasingly diverse and sophisticated, and despite our efforts, they have increased in number due in part to the growing breadth and complexity of IT networks and systems and large number of employees working remotely. Our internal or external IT servers and networks, or those of our third party processors, providers or clients, are vulnerable to cybersecurity risks, including viruses and worms, phishing attacks, ransomware attacks, denial-of-service attacks, physical or electronic break-ins, third party or employee theft or misuse, and similar disruptions, which could disrupt the normal operations of our engagements and impede our ability to provide critical services to our clients, thereby subjecting us to liability under our contracts and applicable data protection laws.

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While we take measures designed to protect the security of, and unauthorized access to, our systems and data, and the privacy of confidential information and personal data, our security controls over our systems and the systems of our processors, vendors and clients with which we operate and rely upon, as well as any other security practices we follow, may not prevent the improper access to or the unauthorized acquisition, use or disclosure of data, including confidential information, personal data, intellectual property and proprietary information. We do not control the operations or facilities of our service providers that collect, store, and process data on our behalf. If any of our service providers that process data on our behalf is subject to a security incident, we may not initially be aware of it, and we may not be able to control the investigation into the incident. In addition, we may be required to notify our clients if one of our service providers is subject to a security incident that affects our clients’ data, and it may disrupt our operations and impede our ability to provide our services. Many of our client contracts do not limit our potential liability for breaches of confidentiality.

In the past, we have experienced, and in the future, we may again experience, data security incidents resulting from unauthorized access to our and our service providers’ systems and unauthorized acquisition of our data and our clients’ data including, but not limited to: inadvertent disclosure, misconfiguration of systems, phishing ransomware or malware attacks. In addition, our clients have experienced, and may in the future experience, breaches of systems and cloud-based services enabled by or provided by us. For example, on March 30, 2022, we announced an unauthorized access to our network and exfiltration of certain source code and project-related documentation for a limited number of clients, as well as certain data files. To date this incident has not had a material impact on our operations, and we are unaware of any material impact on our client's operations. We cannot assure you that our preventative and mitigation actions will fully eliminate the risk of a malicious compromise of our, our third-party service providers' or our customers' systems.

In addition, we may also be bound by contractual obligations related to data privacy and security. If any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to client, third-party or our data, or otherwise mismanages or misappropriates that data, we could be subject to significant litigation, monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions. These monetary damages might not be subject to a contractual limit of liability or an exclusion of consequential or indirect damages and could be significant. In addition, we may not be able to obtain insurance coverage for, or full insurance coverage for, all damages and losses related to security incidents, cyberattacks and other related incidents or similar risks, and any or all such damages and losses could exceed our insurance coverage or be denied by the insurance carriers for any reason, which could have a material adverse effect on our reputation and/or on our business, results of operations and financial condition.

Unauthorized access, disclosure of confidential client and client customer data, intellectual property or personal data or other loss of information, whether through breach of our or others' computer systems, systems failure, loss or theft of confidential information or intellectual property belonging to our clients or our clients' customers, or otherwise, could result in legal claims or proceedings, liability and damages under applicable laws, regulatory investigations or penalties, breach notification obligations, a requirement to provide monitoring services, breach of contract claims, significant fines, administrative sanctions, and could adversely affect our business, revenues, reputation, brand and competitive position and result in financial and other potential losses, as well as require us to expend significant resources to protect against further incidents and to rectify any problems caused by these events.

Our business results of operations and financial condition could be adversely affected by the unauthorized use of our intellectual property or our violation of the intellectual property of others.
 
Our success depends in part on certain methodologies, practices, tools and technical expertise we utilize in designing, developing, implementing and maintaining applications and other proprietary intellectual property (including trade secrets, patents, copyrights and trademarks); and on our ability to avoid infringing on the intellectual property of third parties.

In order to protect our intellectual property rights, we rely on a combination of nondisclosure, confidentiality and other contractual arrangements as well as trade secret, patent, copyright and trademark laws. We hold several trademarks and patents and intend to submit additional U.S. federal and foreign trademark applications for developments relating to additional service offerings in the future. We cannot assure you that we will be successful in maintaining existing, or obtaining future, intellectual property rights or registrations or that the current or future laws of the countries in which we operate or the contractual and other protective measures we take are adequate to protect us from misappropriation or unauthorized use of our intellectual property, or that such laws will not change. We further cannot assure you that we will be able to detect unauthorized use of our intellectual property and take appropriate steps to enforce our rights, and that any such steps will be successful or that we have taken all necessary steps to enforce our intellectual property rights in every jurisdiction in which we operate and that such intellectual property laws are adequate to protect our interest.

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Further, our current and former Globers could challenge our exclusive rights to the software they have developed in the course of their employment. In certain countries in which we operate, the employer is deemed to own the copyright work created by its employees during the course, and within the scope, of their employment, but the employer may be required to satisfy additional legal requirements in order to make further use and dispose of such works. While we believe that we have complied with all such requirements, and have fulfilled all requirements necessary to acquire all rights in software developed by our independent contractors, these requirements are often ambiguously defined and enforced. As a result, we cannot assure you that we would be successful in defending against any claim by our current or former Globers or independent contractors that challenges our exclusive rights over the use and transfer of works those Globers or independent contractors created or requests additional compensation for such works.

We may also be subject to litigation involving claims of patent infringement or violation of other intellectual property rights of third parties. We typically indemnify clients who purchase our services and solutions against potential infringement of intellectual property rights, which subjects us to the risk of indemnification claims. In addition, we are subject to additional risks as a result of our recent and possible future acquisitions and the hiring of new employees who may misappropriate intellectual property from their former employers. Indemnification and other rights under acquisition documents may be limited in term and scope and may therefore provide little or no protection from these risks. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or using technology involving the allegedly infringing intellectual property.

Intellectual property litigation is expensive, time-consuming, could divert management's attention away from our business and are often not subject to liability limits or exclusions. A successful infringement claim against us, could, among other things, require us to pay substantial damages, develop substitute non-infringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and would require us to cease making, licensing or using products that have infringed a third party's intellectual property rights. Protracted litigation could also result in existing or potential clients deferring or limiting their purchase or use of our software product development services or solutions until resolution of such litigation, or could require us to indemnify our clients against infringement claims in certain instances. In addition, any intellectual property claim or litigation, whether we ultimately win or lose, could damage our reputation and materially adversely affect our business, financial condition and results of operations.
 
Our cash flows and results of operations may be adversely affected if we are unable to collect on billed and unbilled receivables from clients.
 
Our business depends on our ability to successfully obtain payment from our clients of the amounts they owe us for work performed. We evaluate the financial condition of our clients and usually bill and collect on relatively short cycles. We maintain provisions against receivables. Actual losses on client balances could differ from those that we anticipate and, as a result, we may need to adjust our provisions. We cannot assure you that we will accurately assess the creditworthiness of our clients. Macroeconomic conditions, such as a potential credit crisis in the global financial system, could also result in financial difficulties for our clients, including limited access to the credit markets, insolvency or bankruptcy. Such conditions could cause clients to delay payment, request modifications of their payment terms, or default on their payment obligations to us, all of which could increase our receivables balance. Timely collection of fees for client services also depends on our ability to complete our contractual commitments and subsequently bill for and collect our contractual service fees. If we are unable to meet our contractual obligations, we might experience delays in the collection of or be unable to collect our client balances, which could adversely affect our results of operations and cash flows. In addition, if we experience an increase in the time required to bill and collect for our services, our cash flows could be adversely affected, which could affect our ability to make necessary investments and, therefore, our results of operations.
 
If we are unable to maintain favorable pricing terms with current or new suppliers, our results of operations would be adversely affected.
 
We rely, to a limited extent, on suppliers of goods and services. In some cases, we have contracts with such parties guaranteeing us favorable pricing terms. We cannot guarantee our ability to maintain such pricing terms beyond the date that pricing terms are fixed pursuant to a written agreement. Furthermore, should economic circumstances change, such that suppliers find it beneficial to change or attempt to renegotiate such pricing terms in their favor, we cannot assure you that we would be able to withstand an increase or achieve a favorable outcome in any such negotiation. Any change in our pricing terms would increase our costs and expenses, which would have an adverse effect on our results of operations.



 
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Strategic acquisitions to complement and expand our business have been and will likely remain an important part of our competitive strategy. If we fail to acquire companies whose prospects, when combined with our company, would increase our value, or if we acquire and fail to efficiently integrate such other companies, then our business, results of operations, and financial condition may be adversely affected.
 
We have expanded, and may continue to expand, our operations through strategically targeted acquisitions focused on deepening our relationships with key clients, extending our technological capacities including services over platforms, broadening our service offering and expanding the geographic footprint of our delivery centers. We completed a number of acquisitions in 2021, 2022 and 2023. Financing of any future acquisitions could require the incurrence of indebtedness, the issuance of equity or a combination of both. In addition, if we finance acquisitions by issuing shares or convertible debt, our existing shareholders may be diluted, which could affect the market price of our shares. There can be no assurance that we will be able to identify, acquire or profitably manage additional businesses or successfully integrate any acquired businesses without substantial expense, delays or other operational or financial risks and problems. Furthermore, acquisitions may involve a number of special risks, including diversion of management's attention, failure to retain key acquired personnel, unanticipated events or legal liabilities, amortization of acquired intangible assets and difficulties entering into new markets. Acquisitions may also result in significant costs and expenses, including retention payments, equity compensation, assumed and/or acquired litigation and other unforeseen claims and liabilities. In addition, any client satisfaction or performance problems within an acquired business could have a material adverse impact on our company's corporate reputation and brand.

We cannot assure you that any acquired businesses would achieve anticipated revenues and earnings. Any failure to manage our acquisition strategy successfully could have a material adverse effect on our business, results of operations and financial condition.

Our indebtedness may affect our ability to operate our business and secure additional financing in the future.

On May 31, 2023, Globant, LLC, one of our U.S. subsidiaries (the "Borrower"), entered into a Fourth Amended and Restated Credit Agreement, by and among certain financial institutions listed therein, as lenders, and HSBC Bank USA, N.A., as administrative agent, issuing bank and swingline lender (the “Fourth A&R Credit Agreement”). The Borrower’s obligations under the Fourth A&R Credit Agreement are guaranteed by the Company and its subsidiaries Globant España S.A. and Globant IT Services Corp., and are secured by substantially all of the Borrower’s assets. The Fourth A&R Credit Agreement also contains certain customary negative and affirmative covenants, which compliance may limit our flexibility in operating our business and our ability to take actions that might be advantageous to us and our shareholders. For more information, see "Additional Information - Material Contracts."

We may also incur additional indebtedness under other credit facilities or debt securities in the future. The governing instruments of such indebtedness could contain additional restrictive covenants that may further restrict our operations and capacity of incurring additional indebtedness. Our ability to meet these covenants may be affected by events beyond our control, which could result in a default, and the exercise of remedies, including acceleration, which could materially adversely affect our financial condition.

We may need additional capital and we may not be able to obtain it.

We may require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue. If these resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain another credit facility or expand the existing one. The sale of additional equity securities could result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to additional operating and financing covenants that would restrict our operations.

Our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including:

investors' perception of, and demand for, securities of technology services companies;
conditions of the U.S. capital markets and other capital markets in which we may seek to raise funds;
our future results of operations and financial condition;
government regulation of foreign investment in the North America, Europe, and Latin America;
global economic, political and other conditions in jurisdictions in which we do business; and
favorability of our credit-rating.

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Financing or raising of capital may not be available in amounts or on terms acceptable to us, or at all. This could limit our ability to grow our business and develop or enhance our service offerings required to respond to market demand or competitive challenges.
 
Our ability to expand our business and procure new contracts or enter into beneficial business arrangements could be affected to the extent we enter into agreements with clients containing non-competition clauses.
 
Some of our services agreements restrict our ability to perform similar services for certain of our clients' competitors under specific circumstances. We may in the future enter into additional agreements with clients that restrict our ability to accept assignments from, or render similar services to, those clients' competitors or customers, or restrict our ability to compete with our clients. These restrictions may hamper our ability to compete for and provide services to other clients in a specific industry in which we have expertise and could materially adversely affect our business, financial condition and results of operations.

Risks Related to our Global Operations.

Our results of operations could be adversely affected by economic and political conditions globally and, in particular, the markets in which we operate.

Because we have global operations, global macroeconomic conditions have a significant effect on our business as well as the businesses of our clients. The global economy has experienced and may continue to experience extreme volatility and disruptions caused by, among others, health pandemics, terrorist acts, political, social and civil unrest, wars and natural disasters. For example, in February 2022, Russia initiated significant military action against Ukraine. In response, the U.S. and certain other countries imposed significant sanctions and export controls against Russia, Belarus and certain individuals and entities connected to Russian or Belarusian political, business, and financial organizations. The U.S. and certain other countries could impose further sanctions, trade restrictions, and other retaliatory actions should the conflict continue or worsen. These sanctions and potential responses from Russia and other countries could adversely affect us, our business partners and customers, what in turn could have a material adverse effect on our business, financial condition and results of operations. Also, customers and suppliers may restrict their business with entities having subsidiaries in certain countries. In addition, the Israel-Hamas conflict also has the potential to disrupt the world economy. An escalation of the conflict, including the involvement of other countries, could cause disruption, instability and volatility in global markets, supply chains and logistics operations, such as recent shipping disruptions in the Red Sea and surrounding waterways and an increase prices of the oil barrels.

The technology services industry is particularly sensitive to the broader economic environment and tends to decline during general economic downturns. If the North American, Latin American, or European economies weaken or slow, inflation in the markets in which we operate, or a negative or uncertain political climate develops or persists, pricing for our services may be depressed and our clients may reduce or postpone their technology spending significantly, which may, in turn, lower the demand for our services and negatively affect our revenues and profitability.

We have subsidiaries in countries in Latin America, Central Europe and Asia. These Central European, Latin American and Asian countries are generally considered to be emerging markets, which are subject to rapid change and greater legal, economic and political risks than more established markets. Current and future changes in governments of those countries, could lead to political instability and disrupt or reverse political, economic and regulatory reforms, which could materially adversely affect our business and operations in those countries.

Our four largest delivery centers are based in Colombia, Argentina, India and Mexico. Latin American countries have historically experienced uneven periods of economic growth, as well as recession, periods of high inflation and economic instability, government deadlock and political instability.

As a consequence of adverse economic conditions in global markets and diminishing commodity prices, the economic growth rates of the economies of many Latin American countries have slowed and some have entered recessions. For example, historically, Argentina, Colombia and Mexico have a history of economic instability and crises (such as inflation and recession). If initiatives adopted by governments to combat economic instability are unsuccessful, macroeconomic conditions can continue to deteriorate.

Decline in economic growth, reduction of demand for our services, economic sanctions and certain countries' response to those sanctions, restrictions or conditions by customers on the contracting of our services and other adverse effects derived from global economic and political volatility and uncertainty could affect us or our business partners and clients, what in turn could have a material adverse effect on our business, financial condition and results of operations.

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The governments of many countries in which we operate have exercised and may continue to exercise significant influence over those countries' economies, which could adversely affect our business, financial condition, results of operations and prospects.

Many commercial laws and regulations in Central Europe and Latin America are relatively new and have been subject to limited interpretation; and, therefore, their application can be unpredictable. In addition, in certain countries in which we operate, the governmental authorities have a high degree of discretion in the interpretation and application of the regulations.

Historically, governments in Latin America have frequently intervened in the economies of their respective countries and have occasionally made significant changes in policy and regulations. Our business, financial condition, results of operations and prospects may be adversely affected by:

changes in government policies or regulations, including such factors as exchange rates and exchange control policies;
inflation and interest rates;
prices, tariff and inflation control policies;
liquidity of domestic capital and lending markets;
energy rationing;
tax policies, royalty and tax increases and retroactive tax claims; and
other political, diplomatic, social and economic developments.

Government influence and intervention could materially adversely affect our business, financial condition and results of operations.

Inflation in the countries in which we operate could adversely affect our business and results of operations.

Following recent global economy disruptions some of the countries in which we operate have experienced, or are currently experiencing, higher rates of inflation. Periods of higher inflation may slow economic growth and significantly impact our results of operations. Inflation is also likely to increase some of our costs and expenses, which we may not be able to fully pass on to our clients, which could adversely affect our operating margins and operating income. In addition, higher inflation could also increase our customers’ operating costs, which could result in reduced budgets for our customers and potentially less demand for our products and services.

As a result of rising inflation, wage costs in the technology services industry in certain countries may increase at a faster rate than in the past and wage inflation for the IT industry may be higher than the overall wage inflation within these countries. We may need to increase the levels of employee compensation more rapidly than in the past to remain competitive, and we may not be able to pass on these increased costs to our clients.

In particular, Latin American countries have historically experienced uneven periods of economic growth, recessions, periods of high inflation and economic instability. For example, Argentina has experienced high levels of inflation over the past several years. Most recently, Argentina’s annual inflation soared to 211.4% in 2023. In addition, inflation rates in the U.S. have reached levels not seen in decades.

Unless we are able to continue reducing our costs and increasing the efficiency and productivity of our employees as well as the prices we can charge for our services, inflation may materially adversely affect our financial condition and results of operations.

Our business, results of operations and financial condition may be adversely affected by fluctuations in currency exchange rates.

Our functional and reporting currency is the U.S. dollar. However, we conduct a substantial portion of our operations outside the United States, and our business, results of operations and financial condition may be adversely impacted by significant fluctuations in foreign currency exchange rates. In addition, fluctuations in exchange rates relative to the U.S. dollar could impair the comparability of our results from period to period.

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A significant portion of our costs are incurred in local currencies while a substantial portion of our revenues are generated in U.S. dollars. For example, the Argentine peso has suffered significant devaluations against the U.S. dollar declining approximately 355.7%, 72.5%, and 22.1% against the U.S. dollar in 2023, 2022 and 2021, respectively, the Mexican peso increased approximately 12.7% and 5.6% against the U.S. dollar in 2023 and 2022, respectively, and decreased 2.9% against the U.S. dollar in 2021; and the Colombian peso increased approximately 20.5% against the U.S dollar in 2023 and decreased 20.8% and 16% against the U.S dollar in 2022 and 2021, respectively.

We periodically evaluate the need for hedging strategies, including the use of such instruments to mitigate the effect of foreign exchange rate fluctuations. During the years ended December 31, 2023, 2022 and 2021, our Argentine, Colombian, Chilean, Indian, Uruguayan, Peruvian, Brazilian, Mexican, European Community Countries and United Kingdom operating subsidiaries entered into foreign exchange contracts for the purpose of hedging the risk of exposure to fluctuations of the different currencies in these countries against the U.S. dollar. If we do not hedge such exposure or we do not do so effectively, an appreciation of those local currencies against the U.S. dollar may raise our costs, which could adversely impact our business, results of operations and financial condition.

In order to control local currency exchange rates, certain countries in Latin America have historically imposed exchange controls and adopted other measures, which could have a material adverse effect on our business, results of operations and financial condition.

Changes in the tax laws, or in their interpretation or enforcement, or the loss of any country-specific tax benefits could have a material adverse effect on our financial condition and results of operations.

We conduct business globally and file income tax returns in multiple jurisdictions. Our consolidated effective income tax rate and other tax liabilities worldwide could be materially adversely affected by several factors, including changes in the amount of income taxed by or allocated to the various jurisdictions in which we operate that have differing statutory tax rates; changes in the tax laws, regulations, interpretations and enforcement; and the resolution of issues arising from tax audits or examinations and any related interest or penalties.

We report our results of operations based on our determination of the amount of taxes owed in the various jurisdictions in which we operate. We have transfer pricing arrangements among our subsidiaries in relation to various aspects of our business, including operations, marketing, sales and delivery functions. Transfer pricing regulations require that any international transaction involving associated enterprises be on arm’s-length terms. We consider the transactions among our subsidiaries to be on arm’s-length terms. The determination of our consolidated provision for income taxes and other tax liabilities requires estimation, judgment and calculations where the ultimate tax determination may not be certain. Our determination of tax liability is always subject to review or examination by authorities in various jurisdictions.

Currently, we enjoy tax benefits from promotion regimes and certain tax incentives in Uruguay, India, and Argentina, among other countries, and we may benefit from additional promotional regimes and tax benefits in the future. For detailed explanations and further discussion, see "Business Overview — Government Support and Incentives". If these tax incentives are changed, terminated, not extended or made unavailable, or comparable new tax incentives are not introduced, we expect that our effective income tax rate and/or our operating expenses would increase significantly, which could materially adversely affect our financial condition and results of operation.

Tax laws, including tax rates, in the jurisdictions in which we operate may change as a result of macroeconomic or other factors outside of our control. For example, on December 20, 2023, the Luxembourg Parliament passed into law the new OECD Pillar Two model rules ("Pillar Two") on global minimum tax, which includes a global minimum tax rate of 15% for groups with a global turnover in excess of EUR 750 million, subject to certain exclusions. We became subject to Pillar Two commencing on January 1, 2024. We estimate that the new rules will result in an increase of approximately 3% in our Income Tax Effective Rate (see note 9 to our audited consolidated financial statements for the year ended December 31, 2023). Further on December 23, 2023, the Argentine executive branch issued a decree calling for the Argentine Congress to hold extraordinary sessions from December 26, 2023 to January 31, 2024 for the discussion of, among others, amendments to the Argentine tax system. On January 1, 2023, in Colombia entered into force a tax reform law, which included, among others, an increase of 10% in the dividend tax rate and the elimination of certain tax benefits and exceptions. Further, on December 28, 2023, the Brazilian Parliament extended the benefits of the ‘lei de desoneração da folha’ (payroll tax relief law), which will become effective on April 1, 2024 and allows certain entities, including our Brazilian subsidiaries, to elect to make payroll tax payments equal to 20% of the payroll payments or 4.5% of gross revenues. The Executive Power of the Brazilian government has issued a medida provisional (provisional measure) revoking the payroll tax relief law. However, on February 27, 2024, the Executive Power reversed the portion of the provisional measure that was repealing the payroll tax relief.

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These and other changes in the tax laws could increase our tax burden and materially adversely affect our financial condition and results of operations.

Our business, results of operations and financial condition may be adversely affected by the various conflicting and/or onerous legal and regulatory obligations required in the countries where we operate.

We have a presence in many countries and plan to continue expanding our international operations, which may subject us to increased business and economic risks that could affect our financial results.

Compliance with complex international laws and regulations that apply to our international operations increases our cost of doing business. These numerous, and sometimes conflicting laws, and regulations include, among others, import/export controls, content requirements, trade restrictions, tariffs, taxation, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act ("FCPA"), the U.K. Bribery Act ("UKBA"), anti-money laundering, whistle blowing, internal control and disclosure rules, such as the SEC Rules on Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure by Public Companies.

Since we provide services to clients throughout the world, and we collect, store, process, use and transfer personal data and other sensitive information, we are subject to laws and regulations related to data security and privacy, as well as other numerous, and sometimes conflicting, legal requirements, including but not limited to the European Union’s General Data Protection Regulation (“GDPR”), the United Kingdom’s GDPR and the Privacy and Electronic Communications Directive 2002/58/EC, the California Consumer Privacy Act (as succeeded by the California Privacy Rights Act), and various other laws governing the protection of privacy, health or other personally identifiable information and data privacy and cybersecurity laws. These laws and regulations continue to evolve, are increasing in complexity and number and increasingly conflict among the various countries in which we operate, which has resulted in greater compliance risk and cost for us. Various privacy laws impose compliance obligations regarding the handling of personal data, including the cross-border transfer of data, and significant financial penalties for noncompliance. For example, failure to comply with the GDPR may lead to regulatory enforcement actions, which can result in monetary penalties of up to the greater of 20 million Euros (or 17.5 million Pounds) or 4% of our worldwide revenue, orders to discontinue certain data processing operations, civil lawsuits, or reputational damage.

Also, we may be unable to transfer personal data between different countries due to data localization laws, regulations, requirements and limitations on cross-border data flows. In the United States, federal, state, and local governments have enacted numerous privacy and data security laws, including consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), data breach notification laws, and personal data privacy laws. For example, state data breach notification laws may come into play in the event of a data breach, thus requiring notice to any affected individuals.

We are also subject to risks relating to compliance with a variety of national and local labor laws including, employee health safety, wages and benefits laws and independent contractor regulations. We may, from time to time, be subject to litigation or administrative actions resulting from claims against us by current or former Globers, individually or as part of class actions, including claims of wrongful termination, discrimination, misclassification or other alleged violations of labor law or other conduct. We may also, from time to time, be subject to litigation resulting from claims against us by third parties, including claims of breach of non-compete and confidentiality provisions of our employees' former employment agreements with such third parties.

In addition, legislation that restricts the performance of outsourcing services could also materially adversely affect our business, financial condition and results of operations. For example, measures aimed at limiting or restricting outsourcing by U.S. companies have been put forward for consideration by the U.S. Congress and in state legislatures to address concerns over the perceived association between offshore outsourcing and the loss of jobs domestically. In 2021 Mexico prohibited outsourcing and regulated subcontracting.

Compliance efforts can be expensive and burdensome, and we could be subject to regulatory investigations and orders, significant fines and penalties, mitigation and breach notification expenses, private litigation and contractual damages, corrective action plans and related regulatory oversight and reputational harm. Our real or perceived failure to comply with these regulations in the conduct of our business could result in fines, penalties (including revocation of licenses or registrations), criminal sanctions against us or our officers, disgorgement of profits, prohibitions on doing business and adverse impact on our brand and reputation. In addition, our failure to comply with these regulations in the context of our obligations to our clients could also result in liability for monetary damages, unfavorable publicity and allegations by our clients that we have not performed our contractual obligations. Due to the varying degree of development of the legal systems of the countries in which we operate, local laws might be insufficient to defend us and preserve our rights. Our failure to comply with applicable regulatory requirements could have a material adverse effect on our business, results of operations and financial condition.

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If we are faced with immigration or work permit restrictions in any country where we currently have personnel onsite at a client location or would like to expand our delivery footprint, then our business, results of operations and financial condition may be adversely affected.

A key part of our strategy is to expand our delivery footprint, including through an increase in the number of employees that we deploy onsite and near client locations. Therefore, we must comply with the immigration, work permit and visa laws and regulations of the countries in which we operate or plan to operate. Our future inability to comply with any of these laws or regulations or to obtain or renew sufficient work permits and/or visas due to the impact of these regulations, including any changes to immigration, work permit and visa regulations in jurisdictions such as the United States and Europe, could have a material adverse effect on our business, results of operations and financial condition.
Risks Related to the Company and the Ownership of Our Common Shares
 
The price of our common shares may be highly volatile.
 
The market price of our common shares may be volatile and may be influenced by many factors, some of which are beyond our control, including:
 
the failure of financial analysts to cover our common shares or changes in financial estimates by analysts;
actual or anticipated variations in our operating results;
changes in financial estimates by financial analysts, or any failure by us to meet or exceed any of these estimates, or changes in the recommendations of any financial analysts that elect to follow our common shares or the shares of our competitors;
announcements by us or our competitors of significant contracts or acquisitions;
future sales of our common shares; and
investor perceptions of us and the industries in which we operate.

In addition, the U.S. capital markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance or results of operations of those companies. These broad market fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, as well as volatility in international capital markets, may cause the market price of our common shares to decline.
 
Downgrades to the U.S. government's sovereign credit rating by any rating agency, as well as negative changes to the perceived creditworthiness of U.S. government-related obligations, could also have a material adverse impact on financial markets and economic conditions in the United States and worldwide. In the past, following periods of volatility in the market price of certain companies' securities, securities class action litigation has been instituted against these companies. This litigation, if instituted against us, could adversely affect our financial condition or results of operations.

We may be classified by the Internal Revenue Service as a "passive foreign investment company" (a "PFIC"), which may result in adverse tax consequences for U.S. investors.

We believe that we will not be a PFIC for U.S. federal income tax purposes for our current taxable year and do not expect to become one in the foreseeable future. However, because PFIC status depends upon the composition of our income and assets and the market value of our assets (including, among others, less than 25% owned equity investments) from time to time, there can be no assurance that we will not be considered a PFIC for any taxable year. Because we have valued goodwill based on the market value of our equity for purposes of taxation, a decrease in the price of our common shares may also result in us becoming a PFIC. The composition of our income and our assets will also be affected by how, and how quickly, we utilize the cash. Under circumstances where the cash is not deployed for active purposes, our risk of becoming a PFIC may increase. If we were treated as a PFIC for any taxable year during which a U.S. investor held common shares, certain adverse tax consequences could apply to such U.S. investor. See "Additional Information — Taxation — U.S. Federal Income Tax Considerations — Passive foreign investment company rules."






 
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Our business and results of operations may be adversely affected by the increased strain on our resources from complying with the reporting, disclosure, and other requirements applicable to public companies in the United States.
 
Compliance with existing, new and changing corporate governance and public disclosure requirements adds uncertainty to our compliance policies and increases our costs of compliance. Changing laws, regulations and standards include those relating to accounting, corporate governance and public disclosure; these include but are not limited to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Sarbanes-Oxley Act of 2002, new SEC regulations and New York Stock Exchange ("NYSE") listing guidelines that result out of the NYSE listing. These laws, regulations and guidelines may lack specificity and are subject to varying interpretations. Their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. In particular, our efforts to comply with certain sections of Section 404 of the Sarbanes-Oxley Act of 2002 ("Section 404") and the related regulations regarding required assessment of internal controls over financial reporting and our independent registered public accounting firm audit of that assessment requires the commitment of significant financial and managerial resources. Testing and maintaining internal controls can divert our management's attention from other matters that are important to the operation of our business. We also expect the regulations to increase our legal and financial compliance costs, make it more difficult to attract and retain qualified officers and members of our board of directors, particularly to serve on our audit committee, and make some activities more difficult, time consuming and costly.
 
Existing, new and changing corporate governance and public disclosure requirements could result in continuing uncertainty regarding compliance matters and higher costs of compliance as a result of ongoing revisions to such governance standards. Our efforts to comply with evolving laws, regulations and standards have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. In addition, new laws, regulations and standards regarding corporate governance may make it more difficult for our company to obtain director and officer liability insurance. Further, our board members and senior management could face an increased risk of personal liability in connection with their performance of duties. As a result, we may face difficulties attracting and retaining qualified board members and senior management, which could harm our business. If we fail to comply with new or changed laws or regulations and standards differ, our business and reputation may be harmed.
 
Failure to establish and maintain effective internal controls in accordance with Section 404 could have a material adverse effect on our business and common share price.
 
As a public company, we are required to document and test our internal control over financial reporting pursuant to Section 404, which requires management assessments and certifications of the effectiveness of our internal control over financial reporting. We have concluded that our internal control over financial reporting is effective as of December 31, 2023 (see Item15. Controls and Procedures for additional information). However, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. We may identify material weaknesses in the future and, accordingly, we may not be able to conclude that our internal control over financial reporting is effective in future periods as required by Section 404.

If we conclude that our internal control over financial reporting is not effective, we cannot be certain as to the timing, cost or management attention that would be required with respect to remediation actions and testing or their effect on our operations. In addition, our independent registered public accounting firm may be unable to provide us with an unqualified report as required by Section 404, or we may be required to restate our financial statements for errors resulting from material weaknesses in our internal controls over financial reporting, and we may fail to meet our public reporting obligations and investors could lose confidence in our reported financial information, which could have a negative effect on the trading price of our common shares.
    
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Our exemption as a "foreign private issuer" from certain rules under the U.S. securities laws may result in less information about us being available to investors than for U.S. companies, which may result in our common shares being less attractive to investors.
 
As a "foreign private issuer" in the United States, we are exempt from certain rules under the U.S. securities laws and are permitted to file less information with the SEC than U.S. companies. As a "foreign private issuer," we are exempt from certain rules under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), that impose certain disclosure obligations and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, our officers, directors and principal shareholders are exempt from the reporting and "short-swing" profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of our common shares. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as companies that are not foreign private issuers whose securities are registered under the Exchange Act. In addition, we are not required to comply with Regulation FD, which restricts the selective disclosure of material information. As a result, our shareholders may not have access to information they may deem important, which may result in our common shares being less attractive to investors.
 
We do not plan to declare dividends, and our ability to do so will be affected by restrictions under Luxembourg law.
 
We have not declared dividends in the past and do not anticipate paying any dividends on our common shares in the foreseeable future. In addition, both our articles of association and the Luxembourg law of August 10, 1915 on commercial companies, as amended (loi du 10 août 1915 sur les sociétés commerciales telle que modifiée) (the "Luxembourg Companies Law"), require a general meeting of shareholders to approve any dividend distribution except as set forth below.
 
Our ability to declare dividends under Luxembourg law is subject to the availability of distributable earnings or available reserves, including share premium. Moreover, if we declare dividends in the future, we may not be able to pay them more frequently than annually. As permitted by Luxembourg Companies Law and subject to the provisions thereof, our articles of association authorize the declaration of dividends more frequently than annually by our board of directors in the form of interim dividends so long as the amount of such interim dividends does not exceed total net income made since the end of the last financial year for which the standalone annual accounts have been approved, plus any net income carried forward and sums drawn from reserves available for this purpose, less the aggregate of the prior year's accumulated losses, the amounts to be set aside for the reserves required by law or by our articles of association for the prior year, and the estimated tax due on such earnings.
 
We depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations and to make dividend payments, which they may not be able to do.
 
Our subsidiaries conduct all of our operations. We have no relevant assets other than the equity interests in our subsidiaries. As a result, our ability to make dividend payments depends on our subsidiaries and their ability to distribute funds to us. The ability of a subsidiary to make these distributions could be affected by covenants in our or their financing agreements or by the law of their respective jurisdictions of incorporation. If we are unable to obtain funds from our subsidiaries, we will be unable to distribute dividends. We do not intend to seek to obtain funds from other sources to pay dividends.
 
Our shareholders may have more difficulty protecting their interests than they would as shareholders of a U.S. corporation, which could adversely impact trading in our common shares and our ability to conduct equity financings.
 
Our corporate affairs are governed by our articles of association and the laws of Luxembourg, including the laws governing joint stock companies. The rights of our shareholders and the responsibilities of our directors and officers under Luxembourg law are different from those applicable to a corporation incorporated in the United States. There may be less publicly available information about us than is regularly published by or about U.S. issuers. In addition, Luxembourg law governing the securities of Luxembourg companies may not be as extensive as those in effect in the United States, and Luxembourg law and regulations in respect of corporate governance matters might not be as protective of minority shareholders as state corporation laws in the United States. Therefore, our shareholders may have more difficulty in protecting their interests in connection with actions taken by our directors and officers or our principal shareholders than they would as shareholders of a corporation incorporated in the United States.
 
Neither our articles of association nor Luxembourg law provides for appraisal rights for dissenting shareholders in certain extraordinary corporate transactions that may otherwise be available to shareholders under certain U.S. state laws. As a result of these differences, our shareholders may have more difficulty protecting their interests than they would as shareholders of a U.S. issuer.
 
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Holders of our common shares may not be able to exercise their pre-emptive subscription rights and may suffer dilution of their shareholding in the event of future common share issuances.
 
Under Luxembourg Companies Law, our shareholders benefit from a pre-emptive subscription right on the issuance of common shares for cash consideration. However, in accordance with Luxembourg law, our articles of association authorize our board of directors to suppress, waive or limit any pre-emptive subscription rights of shareholders provided by Luxembourg law to the extent our board deems such suppression, waiver or limitation advisable for any issuance or issuances of common shares within the scope of our authorized share capital. Such common shares may be issued above, at or below market value as well as by way of incorporation of available reserves (including a premium). This authorization is valid from the date of the extraordinary general meeting of shareholders, which was held on April 19, 2023, and ends on April 19, 2028, the fifth anniversary of the date of such meeting. In addition, a shareholder may not be able to exercise the shareholder's pre-emptive right on a timely basis or at all, unless the shareholder complies with Luxembourg Companies Law and applicable laws in the jurisdiction in which the shareholder is resident, particularly in the United States. As a result, the shareholding of such shareholders may be materially diluted in the event common shares are issued in the future. Moreover, in the case of an increase in capital by a contribution in kind, no pre-emptive rights of the existing shareholders exist.
 
We are organized under the laws of the Grand Duchy of Luxembourg and it may be difficult for you to obtain or enforce judgments or bring original actions against us or our executive officers and directors in the United States.
 
We are organized under the laws of the Grand Duchy of Luxembourg. The majority of our assets are located outside the United States. Furthermore, the majority of our directors and officers and some experts named in this annual report reside outside the United States and a substantial portion of their assets are located outside the United States. Investors may not be able to effect service of process within the United States upon us or these persons or to enforce judgments obtained against us or these persons in U.S. courts, including judgments in actions predicated upon the civil liability provisions of the U.S. federal securities laws. Likewise, it may also be difficult for an investor to enforce in U.S. courts judgments obtained against us or these persons in courts located in jurisdictions outside the United States, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws. It may also be difficult for an investor to bring an original action in a Luxembourg court predicated upon the civil liability provisions of the U.S. federal securities laws against us or these persons. Furthermore, Luxembourg law does not recognize a shareholder's right to bring a derivative action on behalf of the company except in limited cases.
 
As there is no treaty in force on the reciprocal recognition and enforcement of judgments in civil and commercial matters between the United States and the Grand Duchy of Luxembourg, courts in Luxembourg will not automatically recognize and enforce a final judgment rendered by a U.S. court. A valid judgment in civil or commercial matters obtained from a court of competent jurisdiction in the United States may be entered and enforced through a court of competent jurisdiction in Luxembourg, subject to compliance with the enforcement procedures (exequatur). The enforceability in Luxembourg courts of judgments rendered by U.S. courts will be subject prior any enforcement in Luxembourg to the procedure and the conditions set forth in the Luxembourg procedural code, which conditions may include the following as of the date of this annual report (which may change):
 
the judgment of the U.S. court is final and enforceable (exécutoire) in the United States;
the U.S. court had jurisdiction over the subject matter leading to the judgment (that is, its jurisdiction was in compliance both with Luxembourg private international law rules and with the applicable domestic U.S. federal or state jurisdictional rules);
the U.S. court has applied to the dispute the substantive law that would have been applied by Luxembourg courts;
the judgment was granted following proceedings where the counterparty had the opportunity to appear and, if it appeared, to present a defense, and the decision of the foreign court must not have been obtained by fraud, but in compliance with the rights of the defendant;
the U.S. court has acted in accordance with its own procedural laws;
the judgment of the U.S. court does not contravene Luxembourg international public policy; and
the U.S. court proceedings were not of a criminal or tax nature.

Under our articles of association and also pursuant to separate indemnification agreements, we indemnify our directors for and hold them harmless against all claims, actions, suits or proceedings brought against them, subject to limited exceptions. The rights and obligations among or between us and any of our current or former directors and officers are generally governed by the laws of the Grand Duchy of Luxembourg and subject to the jurisdiction of the Luxembourg courts, unless such rights or obligations do not relate to or arise out of their capacities listed above. Although there is doubt as to whether U.S. courts would enforce this indemnification provision in an action brought in the United States under U.S. federal or state securities laws, this provision could make it more difficult to obtain judgments outside Luxembourg or from non-Luxembourg jurisdictions that would apply Luxembourg law against our assets in Luxembourg.
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Luxembourg insolvency laws may offer our shareholders less protection than they would have under U.S. insolvency laws.
 
As a company organized under the laws of the Grand Duchy of Luxembourg and with its registered office in Luxembourg, we are subject to Luxembourg insolvency laws in the event any insolvency proceedings are initiated against us including, among other things, Regulation (EU) No. 2015/848 of the European Parliament and the Council of May 20, 2015 on insolvency proceedings (recast). Should courts in another European country determine that the insolvency laws of that country apply to us in accordance with and subject to such EU regulations, the courts in that country could have jurisdiction over the insolvency proceedings initiated against us. Insolvency laws in Luxembourg or the relevant other European country, if any, may offer our shareholders less protection than they would have under U.S. insolvency laws and make it more difficult for them to recover the amount they could expect to recover in a liquidation under U.S. insolvency laws.
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ITEM 4. INFORMATION ON THE COMPANY
 
A. History and Development of the Company
 
We were founded in 2003 by Martín Migoya, our Chairman and Chief Executive Officer; Guibert Englebienne, our President of Globant X, Globant Ventures and Latin America; Martín Umaran, our Chief Corporate Development Officer and President of EMEA; and Nestor Nocetti, our Executive Vice President of Corporate Affairs. Our founders' vision was to create a global company that succeeds by transforming organizations and providing opportunities for talent around the world to make a positive global impact.
 
We have benefited from strong organic growth and have built a roster of world-class clients, many of which are at the forefront of emerging technologies. Over that same period, we have expanded our network of locations, and we are now present in 30 countries. In addition, we have garnered several awards and recognition from organizations such as Endeavor, the IDC MarketScape, Gartner, Everest Group, Frost & Sullivan, Global Services, Great Place to Work, the International Association of Outsourcing Professionals, Fortune and Fast Company, and we have been the subject of business-school case studies on entrepreneurship at the Massachusetts Institute of Technology, Harvard University and Stanford University in conjunction with the World Economic Forum.

In 2009, we created our Studio Model. Our Studios have deep pockets of knowledge across industries and in the latest technologies and trends. We believe our Studio model helps us foster creativity and innovation while allowing us to build, enhance and consolidate expertise around a variety of emerging technologies. In order to leverage specific best practices and deliver tailored solutions to address our clients' technological challenges, Globant has transitioned its 39 Studios into four networks aimed at unlocking the full potential of client businesses.

Reinvent Studios Network: Taylor businesses through deep industry and tech expertise (e.g., Healthcare & Life Sciences, Games, and Finance).
Create Studios Network: Empower the uniqueness of brands through remarkable experiences (e.g., Globant Create, Product, Commerce, Design, and Conversational Interfaces).
Digital Studios Network: Harness disruptive technology to place business at the forefront of their industries (e.g., Data & AI, Cloud Ops, and Fast Code).
Enterprise Studios Network: Leverage tailored technology for streamlined operations and productivity at scale (e.g., Salesforce, SAP, and Oracle).

This Studio Model has been our trademark for delivering quality services over the years, allowing us to better serve our ever-evolving industry and assist our customers in transforming their organizations.

In July 2014, we closed the initial public offering of our common shares in the United States. Since then, we have closed five follow-on offerings in the United States, with the most recent offering occurring in May 2021.

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While we have grown organically, we have made complementary acquisitions since 2008. Our acquisition strategy is focused on deepening our relationship with key clients, extending our technology capabilities, broadening our service offering and expanding the geographic footprint of our delivery centers worldwide. In 2021, we acquired Cloudshift, a leading Salesforce partner in the UK that specializes in multi-cloud digital transformation. Also, we acquired Hybrido Worldwide, S.L. ("Habitant") to reinforce our capabilities in digital marketing, MadTech and digital sales, and enhance our footprint in Europe. Later in the same year, we acquired an 86% stake in Walmeric Soluciones S.L. ("Walmeric"), a company that specializes in marketing automation technology, combining lead management, online marketing and sales enablement. The Walmeric transaction represents our first product-oriented acquisition and has strengthened our capabilities with respect to digital marketing and digital sales. To expand and further improve our blockchain and crypto-related solutions, we acquired Atix Labs S.R.L. and Atix Labs LLC ("Atix"), a professional services company that specializes in blockchain. Later in 2021, we acquired Navint Partners, LLC and certain of its affiliated entities (collectively "Navint Group"), a leading lead-to-revenue Salesforce partner to strengthen our Salesforce Studio's end-to-end business transformation capabilities and expand our service footprint in the United States, Europe, Middle East and Africa ("EMEA"), and India. In 2022, we acquired Genexus, a low/no code leading platform to foster our product portfolio; Vertic, a digital marketing consultancy, to consolidate our global creative network; Sysdata, a leading business and technology consultancy, focused on delivering digital transformation, to strengthen our delivery capabilities in Italy; eWave, a digital commerce experience consultancy, with strong expertise in Adobe and Salesforce commerce solutions, to strengthen our delivery capabilities in Asia-Pacific; KTBO, a native digital company focused on reinventing businesses through innovative technological solutions; and Ad_bid, a digital media consultancy with rapid growth and a focus on results-oriented advertising for B2B and B2C organizations. Later in the same year, we reached an agreement with La Liga, Spain's top-flight soccer league, to create a new global technology company to lead the reinvention of the sports and entertainment industry. Then, in 2023, Globant expanded its North American footprint and enhanced its healthcare offering through the acquisition of ExperienceIT, a U.S. based consultancy with deep expertise in healthcare. Following this, Globant strengthened its presence in France and continued its European expansion by acquiring Pentalog, a digital transformation company that creates high-quality technology solutions and products for organizations in industries such as finance, sport, gaming, travel and education. Later in the same year, we acquired Iteris Holding Ltda., a Brazilian business and technology consultancy focused on delivering digital transformation, and a majority stake in GUT, an independent creative agency and the Independent Network of the Year award at Cannes Lions 2023. Globant will support GUT's global expansion and maintain GUT’s leadership team, as it continues to focus on building its culture and driving growth. Both companies will now work together to identify valuable cross-selling opportunities. Additionally, Globant completed the acquisition of a service contract in Italy from Chili Tech, the technological division of Chili Group.

For a further description of important corporate developments during fiscal year 2023, see “Financial Statements —Note 26. Business Combinations.”.

In 2019, we launched Be Kind, our long-term sustainability framework. Be Kind is an essential part of our culture in which we encourage everyone to be kind to themselves, their peers, the planet and humanity.

In 2021, we established Globant X, an incubator focused on nurturing and cultivating our homegrown innovation. Globant X aims to productize our most transformative technology into platforms.

In 2021, in connection with our Be Kind to the Planet commitment, we became carbon neutral and signed the Science-Based Targets commitment to reinforce our mission to fight climate change. Our efforts to become a net-zero Company are aligned with our commitment to make the world a better place.

In 2020 and 2021, IDC MarketScape vendor assessments acknowledged Globant as a Worldwide Leader in CX Improvement and a Major Player in Worldwide Salesforce Implementation Services, respectively. Building on this success, Globant received additional accolades in 2022, including being recognized as a Major Contender in Industry 4.0 according to Everest Group, receiving the 2022 Company of the Year Award for Digital Transformation Services by Frost & Sullivan, and being named a Leader in the 2022 SPARK Matrix for Healthcare IT Services by Quadrant Knowledge Solutions. The recognition continued in 2023 as Globant was named a Worldwide Leader in both Artificial Intelligence Services and Software Engineering Services according to IDC MarketScape vendor assessments. Gartner's Magic Quadrant placed them as a Worldwide Challenger in Custom Software Development Services, while Everest Group identified them as a Major Contender in both Digital Transformation Consulting Services and Software Product Engineering Services. Additionally, IDC positioned Globant as a Major Player in Worldwide Experience Design & Build Services for 2023–2024.

Globant was recognized by S&P Global and Corporate Sustainability Assessment (CSA) in the Sustainability Yearbook 2023 for our ESG efforts during 2022.

Also in 2022, Globant produced its first two commercial films: "Seek Reinvention" and "Meet the Future - Reinventing Consultancy." Also, the Company announced a multi-year partnership with FIFA to expand its FIFA+ content app and sponsor global top football competitions, including FIFA World Cup Qatar 2022, and FIFA Women's World Cup Australia & New Zealand 2023.
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During 2023, Globant was named as a Leader in the IDC MarketScape Worldwide Artificial Intelligence Services 2023 Vendor Assessment. Also, Fortune named Globant in its list of the 100 Fastest-Growing Companies. In addition, Globant triumphed by winning the Google Cloud Industry Solution Services Partner of the Year Award for Media & Entertainment and received recognition as a finalist on Fast Company’s List of the 100 Best Workplaces for Innovators International 2023. Lastly, Globant has again been recognized by Brand Finance as the Fastest Growing IT Brand and the 5th strongest IT brand globally.

Globant was also recognized as one of the best places to work in Latin America with special recognitions for Argentina, Uruguay and Colombia where we ended in the top position, according to Great Place to Work. Also in 2022, Fast Company included Globant in its '100 Best Companies for Innovators' list.

Corporate Information
 
Our registered office is located at 37A Avenue J.F. Kennedy L-1855, Luxembourg, and our telephone number is + 352 20 30 15 96 . Globant S.A. is registered with the Luxembourg Trade and Companies Register under number B 173727. We maintain a website at http://www.globant.com. Our website and the information accessible through it are not incorporated into this annual report.

The SEC maintains an internet site at http://www.sec.gov that contains reports, information statements, and other information regarding issuers that file electronically with the SEC.

B. Business Overview
 
Overview
 
Established in 2003 by four entrepreneurs in Argentina, we have evolved to become a leading global technology service provider. Today, we are a publicly-traded company, with our common shares listed on the NYSE under the ticker symbol "GLOB". We continue to maintain the entrepreneurial spirit of our founders throughout our business.

We were one of the first companies to deliver engineering, innovation and design at scale, and we believe that professional services organizations must evolve with technological advances. We have had success facilitating digital transformations while many traditional IT outsourcing vendors and consulting companies have and continue to struggle.

Our clients are facing an accelerated need to bridge their digital business gaps to better support their customers and employees. We leverage our cross-industry expertise and deep understanding of technology to focus on key areas of our clients' businesses to facilitate their digital transformations.

We strive to make the world a better place and, in furtherance of that objective, we focus on three key areas: our Be Kind initiative, our talent and culture, and our services. We believe our focus on these areas has contributed to our success and our clients’ success.

We take pride in our people, and consider them to be our greatest strength. We are committed to growing our community with an emphasis on diversity and inclusion. We have development centers in North America, Latin America, Europe, Asia and Oceania, where we have established initiatives to promote and assist individuals who wish to join the IT industry. As of December 31, 2023, we had 29,150 Globers worldwide, and operations through subsidiaries with offices and Globers in 30 countries.

Our principal operating subsidiaries are located in Argentina, Chile, Colombia, Brazil, India, Mexico, Italy, Moldova, Romania, Peru, Spain, United Kingdom, United States and Uruguay.

For the year ended December 31, 2023, 59.5% of our revenues were generated by clients in North America, 22.1% in Latin America, 15.4% in EMEA and 3.0% in Asia & Oceania.

Our clients include leading global companies such as The Walt Disney Company, which was among our top clients in the year ended December 31, 2023. Additionally, for the year ended December 31, 2023, 89.6% of our revenues came from existing clients who used our services in the prior year. We believe our success in building our client base in one of the most sophisticated and competitive markets for IT services demonstrates the strength of our value proposition, the quality of our execution and the value of our culture of innovation and entrepreneurial spirit.

 
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The market opportunity
 
Significant technological advancement and societal shifts are continuing to impact businesses. Technological spending is forecasted to increase as companies across various industries continue to invest in new innovations, such as AI and other technological advancements, expanding our total addressable market. Globant's service offering now encompasses sophisticated technology consultancy and digital solutions, breakthroughs in the creative industry, and a broad array of AI-based solutions. We believe we are well positioned to take advantage of the fastest-growing areas of the technology sector.

Global IT service providers are equipped to support businesses during this transcendental time in technology, with offerings that include software development, technology consultancy, research and development and digital transformation. According to Gartner, worldwide spending on IT services is expected to reach $2.1 trillion over the next four years.

Recent surveys from leading financial and consulting institutions also reflect that digital transformation continues to be at the forefront of company strategies, as CEOs and C-suite members continue to prioritize AI, cloud, digital transformation, analytics, and CRM and ERP applications, all of which are core to Globant's key competencies.

The use and development of AI is expanding. Gartner forecasts that the market for AI services will reach $443 billion by 2027. At Globant, we are already employing generative AI in our proprietary platforms to increase efficiencies for the Company and our clients. We believe that AI will be the dominant growth driver in the IT services market.
Business and Tech trends

Technology remains a driving force in our rapidly evolving world, impacting both businesses and individuals. As we look ahead to 2024, the emphasis on research and innovation that occurred during 2023 will persist. Organizations of all sizes will continue to explore how to best leverage technology for the benefit of their users.

While businesses in 2023 primarily focused on using AI for cost optimization and efficiency, we believe there was untapped potential in utilizing AI to enhance customer experiences. In 2024, we anticipate that entities that invested in AI will pivot towards differentiating their customer experiences.

We identify two significant trends in AI adoption. The first involves professionals using AI to enhance their efficiency and foster creativity in content creation. This trend is developing organically, making it challenging for companies to rigidly enforce the adoption of these AI tools. As a solution, companies will need to provide their employees with the necessary resources to optimize the development and utilization of AI.

The second AI trend is driven by organizations seeking to reinvent themselves. AI can offer solutions that humans alone cannot achieve, doing so in a faster and more impactful manner. At Globant, we actively engage with these technologies through our platforms, aiming to accelerate innovation on a larger scale with AI.

We believe that organizations that adopt a design-first approach will experience the largest beneficial impact from AI. A design-first approach and ease of use is crucial in the shift towards AI solutions.

Quantum computing, once a concept confined to science fiction, is approaching reality. We believe that in 2024, more organizations will recognize the potential impact of quantum computing on their operations, although only a few will take concrete steps forward. Investments in quantum computing research will continue in pursuit of a commercially viable product.

Robotics, evolving over two decades, has significantly influenced various industries with its testing, automation, and manufacturing solutions innovations. Forecasted by Statista to reach a revenue of $45.09 billion by 2028, the robotics market in 2024 will experience a significant turning point with the emergence of multi-purpose robots due to AI advancements.

Blockchain remains a critical technology for specific industries. We believe that in 2024, digital identities and data security will continue highlighting blockchain's relevance. Ad-hoc corporate adoption in specific industries will persist while they seek ideal governance and interoperability solutions.

Interest in the metaverse will remain stable in 2024, with peak interest anticipated upon the launch of the Apple Vision Pro in February 2024. Major players will continue heavy investments to make the metaverse a daily interaction for individuals. Despite ongoing challenges, the metaverse continues to captivate the interest of key players and innovators.



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Strategy
 
We seek to maintain our status as a leading digital transformation services provider that leverages the latest technologies and methodologies to help organizations respond to the changing demands of their customers and employees. The key elements of our strategy for achieving this objective are, described below:
 
Grow revenue with existing and new clients
 
We will continue to focus on delivering innovative and high value-added solutions that drive revenues for our clients, thereby deepening our relationships and leading to additional revenue opportunities with them. We will continue to target new clients by leveraging our engineering, design and innovation capabilities and our deep understanding of emerging technologies and industries. We will focus on building our brand in order to further penetrate our existing and target markets where there is a strong demand for our knowledge and services.
 
Remain at the forefront of emerging technologies and digital transformation
 
We believe our Studios have been highly effective in enabling us to deliver innovative software solutions that leverage our deep domain expertise across industries, in emerging technologies and related market trends. As new technologies emerge and as market trends change, we will continue to add Studios to remain at the forefront of innovation and digital transformation, which will enable us to enter new markets and capture additional business opportunities.

Development of products and platforms

We will continue to focus on expanding our product and platform offerings to complement our service offerings. Globant X is the division of the Company focused on next-generation products and platforms that help organizations excel and reach their goals more efficiently. Acting as a guide for digital transformation, Globant X productizes ideas and accelerates from proof of concept to minimum viable product to expansion, catapulting them to in-market success.

Attract, train and retain top-quality talent
 
We place a high priority on recruiting, training, and retaining employees, which we believe is integral to our continued ability to meet the challenges of the most complex software development assignments. In doing so, we seek to decentralize our delivery centers by opening centers in locations that may not have developed IT services markets but can provide professionals with the caliber of technical training and experience that we seek. In doing so, we offer highly attractive career opportunities to individuals who might otherwise have had to relocate to larger IT markets. We will continue to develop our scalable human capital platform by implementing resource planning and staffing systems and by attracting, training and developing high-quality professionals, strengthen our relationships with leading universities in different countries, and help universities better prepare graduates for work in our industry. We have agreements to teach, provide internships, and interact on various initiatives with several universities throughout the world.

Selectively pursue strategic acquisitions
 
In building on our track record of successfully acquiring and integrating complementary companies, we will continue to selectively pursue strategic acquisition opportunities that deepen our relationships with key clients, extend our technology capabilities, broaden our service offerings and expand the geographic footprint of our delivery centers in order to enhance our ability to serve our clients.

Competitive Strengths
 
We believe the following strengths differentiate Globant and create the foundation for continued rapid growth in revenues and profitability:
 
Deep domain expertise across industries, in emerging technologies and related market trends
 
We have deep domain expertise across industries, in emerging technologies and related market trends. We organize our areas of expertise in Studios, which we believe provide us with a strong competitive advantage and allow us to leverage prior experiences to deliver superior solutions to clients.



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Long-term relationships with blue chip clients

We have built a roster of blue chip clients such as Google, Electronic Arts, and The Walt Disney Company, many of which themselves are at the forefront of emerging technologies and with whom we have been working for more than ten years. We believe that our success in developing these client relationships reflects the innovative and high value-added services that we provide along with our ability to positively impact our clients' business. Our relationships with these enterprises provide us with an opportunity to access large IT, research and development and marketing budgets. These relationships have driven our growth and have enabled us to engage with new clients.
 
Global delivery with access to deep talent pool

A key element of our strategy is to expand our delivery footprint, including increasing the number of employees that work onsite at our clients or near client locations. We will continue to focus on expanding our global delivery footprint to gain access to additional pools of talent to effectively meet the demands of our clients.

Highly experienced management team
 
Our management team is comprised of seasoned industry professionals with global experience. Our management sets the vision and strategic direction for Globant and drives our growth and entrepreneurial culture. On average, the members of our senior management team have 20 years of experience in the technology industry giving them a comprehensive understanding of the industry as well as insight into the industries in which our clients operate, emerging technologies and opportunities for strategic expansion.

Our services

We deliver our services through our Studio model, Globant X, and our global autonomous culture, each of which is further described below.

1. Our Studios:

Our 39 studios are deep pockets of knowledge, bringing expertise to technologies and industries. We utilize our Studio model to deliver tailored solutions focused on specific challenges and improving the connection between organizations and their customers and employees. Our Studios are categorized by the following four networks:

1. Reinvent Studios Network: designed to focus on specific industries in order to assist our customers reconfigure their businesses, operations, and technology to respond to demands from customers and employees.

2. Digital Studios Network: focuses on developing business models and technical capabilities in the latest technologies and trends to help our customers with their digital transformation, digitizing processes, experiences, and their relationships with their stakeholders, among others.

3. Enterprise Studios Network: combines Globant's knowledge and expertise in enterprise platforms such as Salesforce, SAP, and Oracle with its world-class technologies to drive process innovation, optimization, and customer value.

4. Create Studios Network: combines creativity, marketing, and media with AI, Data, and other cutting-edge technologies to develop full 360 marketing strategies. To bolster our services, in 2023 we acquired a majority stake in GUT, a leading creative global network, to leverage their unique expertise in brand storytelling and advertising.

Reinvent Studios Network:

Airlines: Enhancing passengers experience through digital innovation

We leverage our cross-industry expertise to drive digital transformation and boost business for our clients by putting the passenger experience at the forefront of all strategies.




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Automotive: where mobility meets scale

Our experts and partners are creating cutting-edge solutions, scaling and enhancing customer experiences, leveraging AI for efficiency and boosting new business models. This Studio leverages opportunities in the automotive industry, including assisting companies with the implementation of autonomous driving, providing sustainable solutions across the value chain and helping original equipment manufacturers and mobility companies with the implementation of software architecture to create more efficient mobility solutions.

Business Hacking: hacking the gap between business and technology

    We identify weaknesses in organizations and help companies reinvent those parts, stimulating growth and creating new revenue models along the way. Our unique framework leverages AI to drive growth and innovation, ensuring that the transformation is real and measurable.

EdTech: creating immersive learning experiences
    
This Studio helps to personalize digital transformation of learning and teaching those experiences with scalable technology solutions to build more robust, accessible, engaging, and compelling content throughout the entire learning cycle.

Finance: driving innovation in financial institutions

This Studio leverages our in-depth expertise in the financial sector to deliver customized transformational programs tailored to our client’s needs, which boost new business models and enhance the experience of customers.

Gaming: Engaging through play

Our Gaming Studio specializes in the design and development of world-class games and digital platforms, which work across console, PC, web, social and mobile channels. We enable our clients to leverage game mechanics by helping them develop a vision and execute an idea through production, launch and operation. In addition, we utilize our experience, creative talent, well-established technology frameworks and processes to scale and foster innovation.

Healthcare & Life Sciences: Reinventing the Life Sciences ecosystem through tangible technologically-driven solutions

Technology and life sciences are now intertwined. We aim to bridge the gap to help life sciences and healthcare organizations achieve their mission of delivering innovation and services faster and more efficiently by enabling them to enhance patient value and improve outcomes.

Media and Entertainment: Reach and engage new audiences

With this Studio, we partner with our clients to build meaningful relationships with their customers by providing the most effective and relevant ways of creating, managing, delivering, and monetizing content. Specifically, we assist companies with their broadcast platforms, streaming capabilities, digital marketing and video quality.

Retail: Transforming relationships and unlocking value

We boost innovation through digital retail solutions for full supply chain visibility and automation in tandem with creating phygital experiences that boost engagement for customers. With this Studio, our clients are able to enhance their end-to-end shopper experiences and leverage blockchain technology to ensure traceability of products, warehouse automation and planning of floor operations and delivery.

Smart Payments: empowering the future of payments
We provide strategic business and technical consultancy to help organizations analyze their payment programs, develop technical integration, and deliver experiences that are seamless, personalized, and engaging.





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Sports: Top-tier technology for top-tier sports organizations

To outperform competitors on and off the field, sports organizations must maximize sponsorship value year after year, while still delivering a robust fan experience. We’ve partnered with some of the biggest names in sports, leveraging data, technology, and gaming to increase reach and build sustainable fan engagement, while increasing monetization opportunities. Specifically, we utilize technology to help our clients increase fan engagement, maximize their investment on sponsorship deals and reach and engage new audiences.

Hospitality & Leisure: Building experiences that create long lasting memories

Guests expect personalized, end-to-end digital interactions. We leverage the latest trends and technologies to help companies create a frictionless customer-first approach that delivers relevant and context-appropriate experiences to their guests.

Sustainable Business: Reinventing business through climate action and sustainable tech

We are living through a time of unprecedented climate, societal, and technological change. Companies must develop forward-thinking and disruptive strategies, partnerships, and know-how to be ready and stay relevant in the new green economy. To do so, we provide our clients with sustainable tech strategies and programs.

Our Digital Studios Network:

Blockchain: Driving decentralized solutions

We design and build tailored decentralized and resilient solutions that boost strategic business value enabling efficiency, immutability and transparency.

CloudOps: Helping our customers embrace their cloud transformation journey

By combining the best in cloud technologies, DevOps practices, and innovative capabilities we facilitate new and more efficient ways of doing business for our clients.

Cybersecurity: Building secure digital experiences

We help organizations create secure digital experiences by improving the maturity of software development processes. We have built proprietary security tools to enable businesses to gain better visibility into security risks and quickly take action when needed.

Data & AI: Discovering the real value of data

Using Design Thinking methodologies, we partner with companies’ internal teams to discover, define, and build the best data products and data strategies to meet their business needs. Following agile methodologies, we evolve products and designs from early definitions to get them live in production, ensuring that throughout the process business stakeholders are involved and aligned with the final product.

Digital Experience Platforms: Leading consumer experience to intelligent digital journeys

This Studio focuses on crafting contextualized cross-channel experiences across customer digital journeys using seamless, personalized and scalable solutions. We help companies to find smart new ways to engage their consumers through innovative omnichannel delivery to bring their services and products to unknown spaces to them.

Digital Performance: Maximizing technology delivery

We reinvent how people, processes, and technology work together to maximize functionality and work product.




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Fast Code: Move faster. Deliver value

We deliver value at a high rate by leveraging our set of flexible and ever-evolving platforms that accelerate software development. By improving time-to-value, we help our clients tackle present and future challenges.

Internet of Things: Connecting the physical world

We specialize in providing end-to-end solutions focusing on edge and IoT platform development. Our wide expertise in hardware integration and embedded software development that seamlessly merges into Cloud Platforms ecosystems blurs the boundaries between the physical and digital worlds.

We help our customers to develop new business opportunities and enhance existing products and services, bringing new ones to life.

Metaverse: We open portals into the metaverse

The Metaverse Studio focuses on opening portals to digital spaces for our customers by providing a pipeline for digital twin generation and enhanced content production systems, resulting in a presence in the different virtual online worlds. We help companies create and operate their new virtual spaces where they can extend their brand presence and product offering, which maximizes engagement with their clients and employees while reinventing their business verticals.

Quality Engineering: Enabling quality everywhere

This Studio focuses on reducing our clients' business risks. We provide a comprehensive suite of innovative and robust testing services that ensure high-quality products to meet the needs of demanding, technology-avid users.

Engineering: Empowering business with cutting-edge engineering

We design, build, and evolve world-class digital end-to-end solutions. From human interfaces design to scalable platforms, our full-stack capabilities unleash better and more personalized experiences for customers. We design digital foundations creating not just short-term gains, but long-term technological transformations that transcend digital.

Our Enterprise Studios Network:

Agile Organizations: Enabling organizational evolution in the ever changing game of business

We’re constantly studying the art of adaptation and perfecting tools and tactics such as evidence base management, value stream flow, and adaptive strategy cycle, which help companies successfully navigate uncertainty. When an organization is primed for agile transformation it will reduce the lead-time required to change and increase flexibility to adapt to market disruptions. With this Studio, we offer strategic consulting services that help businesses adapt their organizational structure to maximize efficiencies, provide processes and structures for organizations to exploit existing, and explore new, value propositions, and offer practices and metrics that allow teams to improve and pursue high performance.

AWS: Empower your business with Globant and Amazon Web Services

We combine our global presence, strategic partnership with Amazon Web Services, and deep understanding of cloud technology and business strategy to deliver innovative solutions that help our clients succeed. With a diverse portfolio of Studios, our complementary skill set ensures visionary solutions that pave the pathway to sustained competitiveness in a rapidly evolving market.

Cultural Hacking: Powering cultural transformations

We focus on crafting cultures of empowered and innovative people that help organizations reach their purpose and business goals. We help our clients to define their cultural strategy, adopt new technologies and establish trainings, mentorship and coaching for management and employees.



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Google Cloud: A new era in speed and agility for your business

With over two decades of experience leveraging cutting-edge technologies, Globant helps businesses stay ahead and ensures that its clients succeed in the cloud-first era and achieve their digital transformation goals. With our 360-degree partnership with Google Cloud, we have made significant investments in building a world-class talent pool across the platform, with capabilities spanning across multiple aspects of the Google Cloud product area. We enable organizations to transform their business, modernize their platforms, secure their workloads, and make data-driven decisions by leveraging the most out of Google Cloud Services.

Microsoft: Maximize your technology investments

Our partnership with Microsoft provides businesses with a trusted platform during this era of digital transformation. With Microsoft integration services in cloud transformation, advanced analytics and AI, IoT, and more, we empower organizations to navigate change and drive innovation, while maximizing their return-on-investment.

Oracle: Empower companies' end-to-end sustainable value chain

We help companies evolve the end-to-end value chain with Oracle applications, cloud platforms, and next generation technologies. With 20+ years of Oracle experience in global enterprise transformation combining business consulting, AI/ML-enabled process transformation, organizational change management, and agile practices, we’re highly focused on assuring revenue streams, reducing costs, and optimizing operations.

Process Optimization: efficiency driven by technology

In a fast-changing market, businesses across the world are focusing on making their operations more efficient, adaptable and resilient to increase their return on investment. By partnering with our clients to drive efficiency through technology, we reduce risk by preparing operations against uncertain events. We support business reinvention starting from the core, enhancing operations and processes, and readying the foundation of the organization for transformation.

Salesforce: Your transformation journey begins here

Unleashing the power of data, AI and Salesforce we revolutionize business, ignite growth, and strengthen connections with customers, partners, and employees.

SAP: Accelerating value for enterprise-wide reinvention

Our extensive experience developing complex SAP projects help us deliver end-to-end business process transformation across an entire enterprise. Our SAP experts bring best practices in agile frameworks, enterprise-wide integration capabilities and the cutting-edge technology expertise required for business transformation.

ServiceNow: Reinventing digital experiences for employees, customers and partners

We help clients leverage the full potential of the ServiceNow platform, helping them drive efficiency, agility and innovation to unlock new levels of growth and performance. We work with clients to fully utilize ServiceNow’s robust and unique capabilities, as well as extend its functionality through customization and configuration, to meet specific business needs and goals across IT, HR, customer experience, creative and beyond.

Our Create Studios Network:

Commerce: Reimagine Commerce with next-level digital omnichannel experiences

To increase and retain customers, companies must adapt quickly to changes in customer expectations and consistently deliver excellent omnichannel commerce experiences. The means to doing so is developing and maintaining a future-ready digital commerce ecosystem within the organization. With this Studio, we provide our clients with the necessary digital commerce strategies and solutions.



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Conversational Interfaces: Humanizing the technology

Language and voice capabilities are some of the most powerful tools we’ve evolved for communication. Customers want to engage with businesses in a more human way, and our accelerators can make that possible.

Design: Gain attention for your business in the sea of sameness

The Design Studio focuses on bringing quality, design, strategy and production to worldwide digital challenges. We base the definition of our design on the evidence of consumer behavior and observation of market trends. We create solid and relevant solutions that appeal to both users and businesses.

Globant Create: Reach the next era of growth elevating your media & creativity through the power of AI and cutting-edge marketing technology.

The Globant Create Studio develops 360º marketing strategies providing a full-funnel service that addresses every aspect of digital marketing: from strategy to engagement, from technology to creativity, from acquisition to loyalty, and from insights to meaningful experiences.

Product: Delivering best-in-class digital products

We help clients solve the right problems, delivering value for customers and client organizations from strategy through product delivery.

2. Globant X

Through Globant X, we produce ideas and accelerate transformative tech, taking products and platforms in different growth stages - from POC and MVP to Expansion - and catapulting them to market success. From coding faster, better and smarter, to constantly challenging and hacking businesses, we ignite growth potential through innovative technologies to act as accelerators, enhancers and solutions to specific problems and business needs.

Globant X’s lineup of platforms:

Augoor - Our patented AI- driven platform that delivers an in-depth perspective of codebases. With code search, documentation and visualization, it simplifies the coding process, reduces the hurdles of understanding code, and boosts the developers’ efficiency.

MagnifAI - Globant's AI-powered solution for software quality assurance that increases the efficiency of quality testing by leveraging generative AI and computer vision. From test cases creation and automation to visual testing validations, MagnifAI assists in providing for end-to-end software quality assurance.

StarMeUp - Our behavioral-science-based, AI-enhanced platform that helps companies optimize their culture and create a sense of meaning and belonging at work to decrease attrition and increase employee productivity.

WaaSabi - Our Embedded Finance platform enables companies in any industry to possess fintech capabilities and unleash new revenue streams. From virtual wallets, to asset tokenization, including: cards, POS solutions and money transfers, companies can create any fintech product and launch it in a month.

Walmeric - Walmeric is a lead-to-revenue management product that helps B2C companies with assisted sales to reach their business objectives through accelerated sales and marketing, increasing their conversion rate and reducing their cost per acquisition.

GeneXus - Is a Suite of AI Development Tools. The Software Development Platform powered by Artificial Intelligence that provides eternal youth for code. It simplifies and accelerates the creation, maintenance, and evolution of enterprise solutions by including Low Code, No Code, and Generative AI modules.

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GeneXus Enterprise AI - This platform is the foundation of AI applications that connects companies with all the large language models, building AI solutions that are future-proof and resilient to changes, and provides security and observability of costs, data and interactions. It unlocks the creation of robust AI-Assistants that can integrate and interact with operations, processes, systems and documents, creating new paths of innovation and productivity to explore.     

Navigate - Navigate is a process optimization powerhouse. From business operations to incident management, Navigate is the ultimate control tower for a 360° view of an entire company with process mining and AI, revealing data-driven insights, finding opportunities of enhancements and efficiencies, and providing real-time predictive insights.

BeHealthy - BeHealthy is an innovative white-label platform that promotes wellness and brand engagement through a configurable rewards program.

FluentLab - FluentLab is an AI conversational and engagement solution that creates meaningful conversational experiences. It is also an AI-powered no-code for non-technical users.

3. Global autonomous culture:  

We have developed a software product design and development model, known as Agile Pods. It is designed to better align business and technology teams, driven by a culture of self-regulated teamwork and collaboration across skills, partners and country borders.

Leveraged across divisions, Agile Pods are dedicated to mature emerging technologies and market trends, and provide a constant influx of mature talent and solutions that create intellectual property for our clients. They are self-organized teams that work to meet creative and production goals, make technology decisions and reduce risk. These teams are fully responsible for creating solutions and building and sustaining features, products or platforms. Agile Pods are in constant contact with our clients and are in full control of the products we create, which augments their autonomy and ultimately propels productivity. We manage this by having the Agile Pods at the forefront of our inverted organizational chart, existing with a customer-centric and autonomous culture.

We ensure consistency, accountability and replicability by having Agile Pods follow a well-defined set of maturity criteria. Maturity models describe levels of growth and development as follows: Maturity, Quality, Velocity, and Autonomy. Each level acts as a foundation for the next and lays out a path for learning and growth. As Agile Pods evolve from one level to the next, they are equipped with the understanding and tools to accomplish goals more effectively.

We have recently enhanced our Agile Pod methodology, achieving a significant milestone by certifying almost 100% of our pods in AI. By leveraging AI through our specialized suite of products, we have augmented our analytical prowess and accelerated decision-making, granting us a clear competitive advantage. Also, we have redesigned our people and staff areas to better support our pods, enhancing our agility, and enriching the quality and creativity of our solutions to increase responsiveness to client needs

Associated metrics guide improvement efforts and generate quantitative and qualitative insights to inform iterative design and planning decisions.

Our Delivery Model
 
Our cultural affinity with our clients enables increased interaction that creates close client relationships, increased responsiveness and more efficient delivery of our solutions. As we grow and expand our organization, we will continue diversifying our footprint by expanding into additional locations globally.
 
We believe our presence in many countries creates a key competitive advantage by allowing us to benefit from the abundance of high-quality talent in the region, cultural similarities and geographic proximity to our clients. 

About our Be Kind initiative

We thrive by reinventing businesses and transforming organizations to be ready for a digital and cognitive future, providing world-class opportunities for talent to make a positive impact around the globe.

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Our Be kind Initiative is a global ESG strategy that unites positive impact programs for all of our main stakeholders and consolidates initiatives to tackle critical issues, such as diversity, equity and inclusion, climate change, wellness in the workplace, education, misuses of technology and ethics in AI, among others.

Be kind flows with four pillars:

1. Be kind to yourself

We believe work and personal life purposes must be aligned. The reinvention of the future of business is contingent on people's well-being.

Be kind to Yourself ("BKY") focuses on comprehending the pathway we need to take to unleash our full potential. Understanding people’s well-being depends on a strong work-life balance and taking care of their physical and emotional health. BKY proposes a holistic approach based on the three pillars of our nature: Physical, Mental and Social Well-being.

We have implemented certain initiatives focused on physical well-being, such as weekly webinars to promote good practices of self-care, including those related to nutrition, exercise and preventive medicine; Special Discounts in gyms; a smoking cessation program; yoga and massages onsite; and the availability of fruit and other healthy snacks onsite.

We believe that mental health is a fundamental human right and we want to address it adequately. At Globant, we provide every Glober with a subscription to "Insight Timer member plus", a leading wellness app that has a daily mood check-in tool and over 150,000 guided meditations, courses, and work topics from leading mindfulness teachers, musicians, and psychologists that help to calm the mind, reduce anxiety, manage stress, assist with sleep, and improve happiness. We also provide weekly webinars focused on stress management, emotional intelligence, smart working, financial well-being, and other topics.

Related to wellness at work, every Glober can take a BKY day, a day to enjoy and connect with themselves in the way they like best. Also our Employee Assistance Program ("EAP") is a platform that provides for a unique and confidential space and offers well-being benefits, ways to manage health risks, and ways to inspire positive changes. Globers have immediate access to clinical counselors through video, live chat, tele-support, and online groups on topics such as health and safety concerns; relationship and family matters; and work-related issues.

2. Be kind to peers

Be kind to your Peers ("BKYP") focuses on Globant's Diversity, Equity & Inclusion ("DEI") commitments and structures our quest to generate a positive impact on society. We believe that these concepts improve our work environment and foster innovation.

BKYP is performed in every country we operate in by simultaneously activating global campaigns and adapting them to our community's precise needs.

In 2023 we launched our Diversity, Equity and Inclusion Internal Policy, which focuses on fostering a workplace that is respectful, safe, and inclusive and promotes equal opportunities and non-discrimination at Globant. This policy also serves as a framework for addressing biases, promoting awareness, preventing harassment and ensuring ongoing efforts to adapt to the evolving landscape of diversity and inclusion. We also established our new Anti-harassment Protocol. This protocol is not just a set of guidelines; it is a statement to our shared values. It signifies a promise to nurture a workplace where the seeds of innovation can thrive, uninhibited by any form of harassment.

We drive a DEI culture with the following four tenets:

Gender & Sexuality: We are taking concrete steps to reduce the gender gap. We emphasize the importance of hacking barriers and expanding opportunities so everyone can thrive regardless of gender, gender expression, and sexual orientation.

Women that Build : We have developed a program designed to provide assistance and guidance to women and non-binary individuals at every stage of their professional career. Through various training programs and initiatives, we aim to empower these individuals to thrive and unlock their maximum capabilities.

Women that Build Awards: These awards are a way of inspiring and providing support to those women who can inspire others to join the science, technology, engineering and mathematics industry.
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She Leads: This program is designed for women and non-binary individuals at Globant who want to continue to acquire and build skills for their career development through mentoring sessions, storytelling workshops, and women's circles. As a part of the program, each participant is assigned a mentor who accompanies them through meetings to discuss career development, personal challenges, and other topics.

In 2023, we introduced an internal protocol for transition, adequacy and accompaniment of trans people. This protocol promotes respect and dignity in the workplace, recognizes employees' gender identity, and facilitates their unrestricted personal development. It aims to ensure equal rights, opportunities, training, and resources for trans individuals, while also streamlining the process of updating internal records to align with their self-perceived gender.

Accessibility & Neurodiversity: By recognizing and battling prejudices and labels, we can focus on what is truly important about a person: their skills, knowledge, values, and attitudes. At Globant, we create experiences that allow each Glober to learn and develop in a way that best fits their style, interests, and needs.

UnlimITed: Through this program, we aim to transform our organizations by creating workspaces that enhance the experience of people with disabilities, where unlimited possibilities inspire others to unleash their maximum potential in the company and industry.

Multiculturalism & Ethnicity: We believe that different ideas, perspectives, and life experiences converge on better solutions. Merging our backgrounds to devise new solutions is the right pathway.

Black in Tech: This DE&I program is focused on providing equal opportunities for the black community. This year the program started its expansion from Brazil to other countries in South America and Europe.

Generational Diversity: We seek a range of experiences and perspectives from a generationally diverse pool of Globers to improve our culture and client service. We have actively worked towards promoting generational diversity in every webinar and team we engage with.

3. Be kind to humanity:

Be kind to Humanity is to be kind “through technology”, taking action to impact the lives of millions of people tackling global concerns, promoting innovation, and providing inclusive opportunities.

Committed to empowering humanity through the proper usage of technology, at Globant, awareness, ethics, talent, and innovation converge to support society's evolution through these guidelines. Two fundamental axes are in place to promote our mission:

1. Ed in Tech - Promoting Inclusion Through Education: EdTech is not merely a technological boom; it is a means to shape the future of society. Recognizing the global imbalance in access to technology, we are committed to addressing this disparity through initiatives such as Code your Future and Inspire. By promoting inclusion through education, we strive to bridge the gap and create equal opportunities for all.

Code your Future: This initiative originated in 2019 as Globant's scholarship program for young people to study technology. Today, it is made up of various opportunities for training at a global level and in local communities, providing inclusion opportunities through education in technology and employability. We work on initiatives such as: Victims of Armed Conflict, Prison Population, War Veterans and Socio-Economic Vulnerability.

Inspire: This is an initiative to transform reality through education and provide the right tools to inform, motivate, and facilitate access to STEAM careers to children and teenagers worldwide. Through different programs, we seek to inspire youngsters to develop their interest in technology and gain skills in tech-related disciplines.

The Inspire Garage: This program addresses high school students ranging from 13 to 17 years old. We seek to inspire curiosity among youngsters, teaching them the best uses for technology with the guidance of highly trained Globant volunteers (Globanteers). Subscribers can join masterclasses, workshops, challenges, and mentorship related to the field of their preference, such as programming, gaming, design, or digital marketing.

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2. Tech for Good - Driving technology at the service of humanity: Our commitment to sustainable development is embodied in the Tech for Good pillar. Through initiatives like the Be Kind Tech Fund and Globant Labs, we undertake responsible, supportive, facilitative, and transformative actions. We are dedicated to mitigating the negative impacts of technology, solving problems, optimizing benefits and maximizing positive impacts for sustainable, equitable and inclusive growth.

Globant Labs: Globant Labs is where Globers, through our collaborative culture, create, developer and carry out projects. Globant Labs promotes the development of initiatives that have a real and measurable impact, provide tech innovation, are scalable in their reach and aligned with one of Be Kind pillar commitments. Through the Globant Labs, we support the development of innovative solutions provided to the community that tackle some of the most significant humankind issues, such as autism, childhood malnutrition, climate change, and illiteracy.

Be Kind Tech Fund: this initiative is managed by Globant Ventures, and is publicly committed to investing in start-ups developing apps, products, and platforms that tackle the misuse of technology and its negative impact on society. Online harassment, information bubbles & polarization, data privacy and security, screen time abuse and AI bias are some of our main focuses in this work area.

4. Be kind to the planet

Be kind to the Planet has long been engaged in transforming people's lives by reducing emissions and creating a more sustainable world. Through this program, we continue to support projects that restore the planet and lead our clients to achieve their environmental commitments.

Climate change is an urgent call for business leaders. Our ESG commitments for the BKP pillar are: Globant’s public commitments to carbon neutrality and reduction trajectories aligned with the Science-Based Targets Initiative’s standards of the United Nations Race to Zero Initiative. Our “Digital Sobriety” techniques are intended to support our clients, through the design of digital services and products, in their quest to reduce CO₂-eq.

Our climate strategy focuses on the promotion, both internally and externally, of four simultaneous efforts: (1) Measure: calculate Globant's Carbon Footprint which helps us to fully grasp the scale of our environmental impact. (2) Reduce: we are committed to actively pursuing reduction objectives, aligning with the Science Based Targets initiative, thereby contributing to the global endeavor to tackle climate change. (3) Compensate: Since 2021, we have reached carbon neutrality, and we continue to support carbon offsetting projects that enhance environmental well-being and invest in such projects to ensure that our operations are carbon neutral; and (4) Disclose: We are strong proponents of transparency, as we consistently report on our progress towards a low-carbon economy, providing our stakeholders with information regarding our climate strategy to build trust and reinforce our dedication to climate change mitigation.

We believe that adaptation is a crucial response strategy to the ever-growing challenges posed by changing climate. Since 2022 we have diligently strived to align our strategies with the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations, including by introducing climate-related issues in our governance, risk management and strategy. We disclosed our progress towards metrics and targets and our mitigation and adaptation actions in the context of business climate-related risks and opportunities in our last TCFD report, which can be found at: www.globant.com/be-kind/esg

The tech industry, like every other industry, is responsible for producing a significant amount of emissions, mainly related to the energy consumption necessary for producing and providing IT products and services. As a digitally-native company, we recognize the importance of acknowledging and mitigating technology's impact on the environment. Through practices like Green IT, Digital Sobriety and Planet-Centric design techniques, we empower our Globers to learn how to minimize their digital carbon footprint and contribute to a more sustainable digital future. We partner with the Green Software Foundation, an institution of global organizations committed to creating best practices for building sustainable software to reduce carbon footprints.

Our talent and our culture

Our culture
 
Our culture is the foundation that supports and facilitates our distinctive approach and advances our organization forward. It can be best described as entrepreneurial, flexible, sustainable and team-oriented, and is built on three main motivational pillars and nine core values.

Our culture is built on three main motivational pillars and nine core values.
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Our motivational pillars are: Autonomy, Mastery and Purpose. Through Autonomy, we empower Globers to take ownership of their client projects, professional development and careers. Mastery is about constant improvement, aiming for excellence and exceeding expectations. Finally, we believe that only by sharing a common Purpose will we build a company for the long-term that breaks from the status quo, is recognized as a leader in the delivery of innovative software solutions and creates value for our stakeholders.
 
Our core values are:

Think Big – We believe that we can build a world-class company that provides Globers with a global career path. Our work is based on constant challenges and growth.
Drive Innovation – We confront every "impossible" and seek to innovate in order to break paradigms.
Excellence in Your Work – We know that problems we face now will reappear in future projects so we try to solve the obstacles that affect us today.
Team Player – We encourage Globers to get to know their colleagues and to support one another. Together, we are going to improve our profession, company and countries. We operate as one team whether it's solving a problem or celebrating excellent results. We also all have the right to be heard and respected.
Have Fun – As Globers, we believe in finding pleasure in our daily tasks, creating a pleasant work atmosphere and building friendships among colleagues.
Be kind – This value represents our vision of doing business and conducting ourselves in an ethical manner, with integrity, and our responsibility to improve our society, transform ourselves through kindness and make the world a better place.
Own the Place – Through our autonomy pillar, we empower Globers to embrace the entrepreneurial spirit. We are proactive, passionate doers, and committed to our goals.
AI Hero - This value reflects the importance of AI at our company. AI is our edge and is at the core of many of our offerings. We believe AI will empower us to stay relevant and drive evolution.
Cross-selling Hero - This value encourages different teams to collaborate, maximizing all of our services, platforms, Studio Networks and integrating partners and teams. With this cross-selling mindset, we build bridges and amplify the impact of our solutions.

Our workplace embodies our culture

We reimagined and designed workplaces to enhance the overall work experience. We developed a new model office focused on where and how Globers want to work.

Globant's offices are being reshaped to meet a social purpose, providing flexibility and a wide range of options. We want to provide employees with the ability to work in different environments, feel comfortable in the way they work, and undergo a full workday without having to be in the same space constantly. Experiencing the office also means developing Globant’s culture. We prioritize spaces where people can share, connect and exchange moments that would be difficult to experience if everyone was at home. We seek to consolidate a sense of belonging and continue to foster our core values.

Fostering employees’ career growth

Globers who are eager to grow, expand their knowledge, and discover new possibilities have a vast number of opportunities available to them at Globant. We want to empower them to make their own decisions and contributions to the company and make the most out of these five professional development dimensions:

Technology - Our 39 Studios consolidate experience in more than 100 emerging technologies and practices where Globers can learn, develop, specialize and stay relevant. We have numerous trainings and development opportunities that allow them to grow professionally.
Clients - We have a portfolio of leading global brands that Globers can work with over the course of their career.
Industries - We work with leading companies from different industries, such as media and entertainment; banks, financial services and insurance; and consumer, retail and manufacturing. This enables Globers to benefit from an in-depth look into many industries and gives them the opportunity to specialize in one.
Specialty - Globers can transition their career, role or position. They can develop their career by gaining seniority in their current path or moving internally into other roles in different areas of expertise.
Geocultural diversity - We encourage Globers to seek new opportunities and embrace cultural exchanges. Our Globers can work on projects with people from diverse cultures and have the chance to live an international experience. We have open positions and relocation opportunities in all of the countries where we operate.
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Innovation
 
Innovation and creativity, as fundamental values of our day-to-day, are consistently emphasized and embraced across our entire organization.

Entrepreneurship

Globant was created as a start up. It was built by entrepreneurs and, over the years, many Globers have made a difference by creating and driving innovation. Entrepreneurship is one of our keys to success, and we encourage Globers to dream and create meaningful and rewarding experiences for our customers.

We have our own accelerator for tech startups named Globant Ventures. The objective of Globant Ventures is to promote the emergence of new entrepreneurs that are involved in cutting-edge areas of technology, such as AI and other emerging trends.

Availability of high-quality talent
 
According to Revelo, since 2021, there have been 739,000 new tech graduates annually in Latin America. Moreover, in recent years, many Latin American countries have made significant investments in developing tech talent. With an increase in national and local innovation incentive programs and the expansion of technical universities, Latin America now boasts a growing and capable pool of talent for recruitment. As of 2022, N-iX estimates that the Latin America talent pool consists of almost 2 million professionals. This labor pool remains relatively untapped compared to other regions such as North America, Central and Eastern Europe and Asia. The region's professionals possess a breadth of skills that is optimally suited for providing technology services at competitive rates. In addition, institutions of higher education in the region offer rigorous academic programs to develop professionals with technical expertise who are competitive on a global scale. Furthermore, Latin America has a significant number of individuals who speak multiple languages, including English, Spanish, Portuguese, Italian, German and French, providing a distinct advantage in delivering engineering, design and innovation services to key markets in the United States and Europe.

India offers significant graduate talent. According to the Strategic Review of The National Association of Software and Services Companies (NASSCOM), the Indian IT-BPM Industry currently employs around 5.4 million people. In terms of students, more than 5 million students graduate every year, and almost 15% of these graduates are considered employable by Tier 1/Tier 2 companies.

Government Support and Incentives

Argentina
 
The Knowledge Economy Law No. 27,506 (the "Knowledge Economy Law"), which replaced the Software Promotion Law No. 25,922 (the “Software Promotion Law”) went into effect on January 1, 2020 for the legal entities adhered to the Software Promotion Law, and is effective until December 31, 2029. Pursuant to the Knowledge Economy Law, the beneficiaries will enjoy the following benefits:

Stability in the enjoyment of the regime benefits.
Exemption from any value-added tax withholding or collection regimes only in the case of export operations.
A reduction in the corporate income tax liability originated in the promoted activities of 60% for micro and small enterprises, 40% for medium-sized enterprises and 20% for large enterprises.
Allowance to deduct as cost any payment or withholding of foreign taxes on taxed income of Argentine source.
Granting of a tax credit bond of up to 70% of the social security contributions of the employees associated with the promoted activities. Such bonds can be used within the following 24 months (extendable for additional 12 months with justified cause) to pay Income Tax (up to a percentage of the exports reported each year), value added tax ("VAT") or other federal taxes. The bonds may be transferred on one occasion if the beneficiary has exports of services related to the promoted activity which represent at least 70% of its annual revenue. The amount of bonds to be issued could be increased to 80% of the paid social security contributions when the newly-hired employees are members of certain minorities. This benefit has a quota established annually.
Duties on export of services taxed at 0% rate from December 22, 2020.

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In order to maintain the benefits, the beneficiaries must prove every two years that they meet certain requirements. In addition, the benefits are subject to an annual quota determined in Argentine Pesos. On December 27, 2023, through Decree No. 88/2023, the Argentine Executive Branch established the extension of the annual national budget that was in force in 2023, meaning that the nominal amount in Argentine pesos for this benefit is the same as last year. Considering the inflationary context in Argentina, this implies that this benefit is adversely impacted.

On October 11, 2022, the Argentine Executive Branch created the Investment Promotion Regime for Exports of Knowledge Economy Activities, pursuant to which eligible entities (i.e., entities submitting projects for investments in infrastructure, capital goods and working capital that seek to increase exports through an investment of over $3.0 million), can benefit from an exception to the mandatory repatriation through the FX Market of an amount equal to up to 20% of the foreign currency received as foreign direct investment. Beneficiaries registered in the National Registry may enjoy an additional benefit consisting of a free availability of up to 30% of the foreign currency received from the incremental net exports, which may be used for paying salaries in foreign currency.

On August 18, 2023, Argentina and the Inter-American Development Bank entered into an agreement for the disbursement of US$35,000,000 to support the Investment Promotion Regime for Exports of Knowledge Economy Activities.

Our subsidiaries, Atix Labs S.R.L., BSF S.A., IAFH Global S.A. and Sistemas Globales S.A were approved as beneficiaries of the Knowledge Economy Law by the Subsecretary of Knowledge Economy and incorporated into the National Registry on July 8, 2021, October 15, 2021, December 14, 2021, and February 8, 2022 respectively. Benefits were granted as of January 1, 2020.

India
 
In India, under the Special Economic Zones Act of 2005, the services provided by export-oriented companies within Special Economic Zones (each, a "SEZ") are eligible for a deduction of 100% of the profits or gains derived from the export of services for the first five years from the financial year in which the company commenced the provision of services and 50% of such profits or gains for the five years thereafter. Companies must meet the conditions under Section 10AA of Income Tax Act to be eligible for the benefit.  Other tax benefits are also available for registered special economic zone ("SEZ") companies. 

Some locations of our Indian subsidiary are located in a SEZ and have completed the SEZ registration process. Consequently, we started receiving the tax benefit on August 2, 2017. With the growth of our business in a SEZ, our Indian subsidiary may be required to compute its tax liability under Minimum Alternate Tax ("MAT") in future years at the current rate of approximately 21.3%, including surcharges, as its tax liability under the general tax provisions may be lower compared to the MAT liability.

Uruguay

In 1988, Law No. 15,921 created Uruguay's Free Trade Zone regime allowing any type of industrial, commercial, or service activity to be carried out in a specifically delimited areas of the Uruguayan territory and be performed outside Uruguay.

The main benefits include the following:

An almost full tax exemption (Corporate Income Tax "IRAE", Net Wealth Tax-IP, VAT and several withholding taxes) and customs duties exemption; and
Foreign employees may opt out of the Uruguayan social security system and, with regard to personal income tax, opt to be subject to Non-Residents Income Tax at a 12% flat rate instead of Individual Tax.

On December 8, 2017, Uruguay’s Executive Power enacted Law No. 19,566, introducing changes to Law No. 15,921, The new Law allows for services rendered to third countries from the Free Trade Zone to also be rendered to corporate income taxpayers inside the Uruguayan, non-Free Trade Zone territory.

Our subsidiary in Uruguay, Sistemas Globales Uruguay S.A., is situated in a Free Trade Zone and is eligible for the fiscal benefits.

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Methodologies and Tools
 
Effectively delivering the innovative software solutions that we offer requires highly evolved methodologies and tools. Since inception, we have invested significant resources into developing a proprietary suite of internal applications and tools to assist us in developing solutions for our clients and manage all aspects of our delivery process. These applications and tools are designed to promote transparency, and knowledge-sharing, enhance coordination and cooperation, reduce risks such as security breaches and cost overruns, and provide control as well as visibility across all stages of the project lifecycle, for both our clients and us. Our key methodologies and tools are described below.

Quality Management System
 
We have developed and implemented a quality management system in order to document our best business practices, satisfy the requirements and expectations of our clients and improve the management of our projects. We believe that continuous process improvement produces better software solutions, which enhances our clients' satisfaction and adds value to their business.
 
Our quality management system is certified under the requirements of the international standard ISO 9001:2015, the Capability Maturity Model Integration (CMMI-DEV V2.0 without SAM: Maturity Level 3) process areas and the Project Management Institute (PMI). This certification indicates that processes are well characterized, understood, and are described in company standards, procedures, tools and methods.
To assure process quality, we implement different practices, including fulfilling quality objectives, defining standard processes and guidelines for project teams, continuously evaluating processes for improvement, verifying adherence to organizational standards, providing support and training for quality standards, informing stakeholders about quality control, escalating unresolved issues to upper management, and gathering client feedback for continuous improvement.
 Since 2013, Globant certified ISO 27001, a standard that provides a model for establishing, implementing, operating, monitoring, reviewing, maintaining, and improving an information security management system (ISMS). The process of certifying ISO 27001 ensures that ISMS is under explicit management control. In 2016, we migrated successfully to the ISO 27001:2013.  
Clients
 
At Globant, we focus on delivering innovative and high value-added solutions that drive revenues and brand awareness for our clients. We believe that our approach deepens our relationships and leads to additional revenue opportunities. We also target new clients by showcasing our engineering, design and innovation capabilities along with our deep understanding of digital journeys, emerging technologies and related market trends.
 
Our clients include primarily medium to large-sized companies based in North America, Latin America, Europe, Middle East and Africa, and Asia and Oceania, operating in a broad range of industries, including Media and Entertainment, Professional Services, Technology and Telecommunications, Travel and Hospitality, Healthcare, Banks, Financial Services and Insurance, and Consumer, Retail and Manufacturing. We believe clients choose us based on our ability to understand their business and help them drive revenues, as well as our innovative and high value-added business proposals, tailored Studio-based solutions, and our reputation for high quality execution. We have been able to grow with, and retain our clients by merging their industry knowledge with our expertise in the latest market trends to deliver tangible business value.
 
We typically enter into a master services agreement (or MSA) with our clients, which provides a framework for services and a statement of work (or SOW) to define the scope, timing, pricing terms and performance criteria of each individual engagement under the MSA. We generate 46.7% of our revenue from long-term projects with terms greater than 24 months.
 
During 2023, 2022 and 2021, our ten largest clients based on revenues accounted for 32.0%, 35.6% and 39.1% of our revenues, respectively. Our top client for the years ended December 31, 2023, 2022 and 2021, The Walt Disney Company, accounted for 8.7%, 10.7% and 10.9% of our revenues, respectively.






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The following table sets forth the amount and percentage of our revenues for the years presented by client location:  
 Year ended December 31,
 202320222021
 (in thousands, except percentages)
By Geography
North America$1,245,972 59.5 %$1,135,148 63.8 %$831,300 64.1 %
Latin America463,223 22.1 %408,354 22.9 %288,315 22.2 %
Europe, Middle East & Africa323,546 15.4 %186,723 10.5 %151,334 11.7 %
Asia & Oceania63,198 3.0 %50,018 2.8 %26,129 2.0 %
Revenues$2,095,939 100.0 %$1,780,243 100.0 %$1,297,078 100.0 %
     
The following table shows the distribution of our clients by revenues for the years presented:  
 Year ended December 31,
 202320222021
Over $5 Million806542
$1 - $5 Million231194143
$0.5 - $1 Million155132106
$0.1 - $0.5 Million465386287
Less than $0.1 Million (*)679472343
Total Clients (*)1,610 1,249 921
(*) Represents customers with more than $0.01 million in revenues in the last twelve months.

Sales and Marketing
 
Our growth strategy is based on six pillars: (i) leveraging our broad expertise; (ii) growing within existing clients; (iii) acquiring new clients; (iv) geographic expansion; (v) products and platforms; and (vi) pursuing strategic acquisitions. Our expertise and Studio approach help us expand the portfolio and practices we offer to our clients. Our acquisitions are pursued with the aim of fulfilling strategic goals, such as growing into a new geography or the expansion of specializations.

Under our multi-pronged, integrated sales and marketing strategy, our senior management, sales executives, sales managers, account managers and engagement managers work collaboratively to target, acquire and retain new clients and expand our work for existing clients. Globant's team is currently comprised of 338 sales professionals worldwide.
 
Beyond leveraging our broad expertise, our sales strategy is driven by three fundamentals: retain, develop and acquire ("RDA"). The retention component is focused on maintaining our wallet share with existing accounts through flawless execution on our engagements. The development component emphasizes developing existing client relationships by significantly expanding our wallet share and capturing business from our competitors. The acquisition component targets new client accounts. Through our RDA strategy, as well as marketing and branding events, we are able to acquire new or expand existing engagements in our large and growing addressable market.

New Clients
 
We seek to create relationships with strategic clients through existing client referrals or through our multi-tiered approach. Our approach begins by identifying industries and geographic locations with solid growth potential. Once potential clients are identified, we seek to engage the market-facing management personnel of those companies instead of their IT divisions, which allows us to get a better understanding of the prospect's business model before engaging with its IT personnel. The focus on an enterprise's revenue drivers allows us to highlight the value of our services in meeting our client's business needs, thereby differentiating us.
 
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Our account sales teams are made up of sales executives and sales managers, and follow specific guidelines for managing opportunities when contacting potential new clients. Before a sales team approaches a prospective client, we gather significant intelligence and insight into the client's potential needs, creating a specific value proposition for discussion during the engagement process. Additional opportunities resulting from the planned targeted engagement are gathered and tracked. Once an appropriate opportunity has been identified and confirmed with the client, our sales team performs account and competition mapping and enlists internal industry and subject matter experts as well as pre-sales engineers from all of the participating Studios. We then generate proposals to present to and negotiate with the client. Once we have secured the engagement, our sales executives work closely with the Globant leadership team, partners and subject matter experts from our Studios to ensure that we exceed our new client's expectations.
 
From time to time, we use ideation sessions and discovery engagements in our pre-sales process. During the discovery engagements, we meet with clients to discuss their goals and develop creative solutions. The discovery engagement sessions help us discover our clients' main objectives, even if those objectives are not explicitly stated. These sessions are critical in helping us to offer solutions that will adapt to our clients' needs and wishes. This allows us to showcase our expertise in emerging technologies to the prospective client while also allowing us to generate a significant number of possible future client opportunities.
 
Existing Clients
 
Once we have established the client relationship, we are focused on driving future growth through increased client loyalty and retention. We leverage our historical successes with existing clients and our relationships with our clients' key decision-makers to cross-sell additional services, thereby expanding the scope of our engagements to other departments within our clients' organizations. We seek to increase our revenues from existing clients through our account managers, technical directors, program managers, leadership team, Studio partners, and subject matter experts.

Since its launch in 2016, we have advanced our growth strategy within the framework of our 50-Squared vision. Through this initiative, we assigned our most senior teams to concentrate on 50 clients, each anticipated to yield $50 million in revenue. As our 50-Squared vision evolved, we began to broaden our scope, enhance our services, and attract top-tier talent across various industries and regions worldwide. Notably, many of our key clients have flourished under this program. Now, we conduct our growth strategy under our 100-Squared vision, aiming to create enduring relationships that yield $100 million in revenue from each of our top 100 accounts.

We undertake periodic reviews to identify existing clients that we believe are of strategic importance based on, among other things, the amount of revenue we generate from the client, as well as the growth potential and brand recognition that the client provides.

Marketing
 
To fully implement a digital and cognitive transformation, we also help our customers stay relevant within their industries and audiences by providing helpful information and initiatives to understand their users’ environment, competitors and behavior. With research, SME gatherings, webinars, workshops and conferences, our leaders offer valuable insights to help organizations create valuable and emotional experiences for the audience.

As of December 31, 2023, our marketing department, Stay Relevant, is based in Latin America, North America, Europe and India. This team promotes our brand through a variety of channels, including the following:
 
Converge: Our series of executive events that bring together some of the best creative minds in the industry for one amazing day of igniting stories, inventive ideas, learning experiences, and "wow" technology showcases that enable attendees to re-think the new ways they do business.
Sentinel Report: A sentinel report to provide insightful evidence of consumer behavior and market trends that ignite strategic thinking
Trends Applied: A series of reports and LIVE conversations that action to technology trends in key industries, helping stakeholders get a competitive advantage with emergent technologies.
TechNFest: Our signature event for talent where we offer talks and demos on the latest tech trends and showcase Globant’s workplace experience.
Reports and whitepapers: Special reports that analyze trends and the impact these have on businesses.
Success Stories: A yearly initiative where participants share experiences that bridge the gap between complex technical challenges and the brands and people behind it.
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Globant Awards: Global awards with two editions - Women that Build, which recognizes women who inspire, build, lead and help create change, and Digital Disruptors, which acknowledges all those disruptors that lead the digital and cognitive revolution.
Webinars: Explore different trends and technologies in depth showcasing views from experts in the field.
Events: Small events for specific guests or partners to large events that welcome the community.
Podcasts: Discussion of tech trends and DEI perspectives.
Blog: Explore content on the latest trends and best practices in the different industries we work with.
Newsletter: Monthly update to seek reinvention in every industry.
Books: Experts share their fresh perspectives and industry insights.

Seasonality

Our business is seasonal and as a result, our revenues and profitability fluctuate from quarter to quarter. Our revenues tend to be higher in the third and fourth quarters of each year compared to the first and second quarters of each year due to seasonal factors. During the first quarter of each year, which includes summer months in the southern hemisphere, there is a general slowdown in business activities and a reduced number of working days for our IT professionals based in the southern hemisphere, which results in fewer hours being billed on client projects and therefore, lower revenues being recognized on those projects. In addition, some of the reduction in the number of working days for our IT professionals in the first or second quarter of the year is due to the Easter holiday. Depending on whether the Easter holiday falls in March or April of a given year, the effect on our revenues and profitability can appear either in the first or second quarter of that year. Finally, we may implement annual salary increases in the second and fourth quarters of each year. Our revenues are traditionally higher, and our margins tend to increase, in the third and fourth quarters of each year, when utilization of our IT professionals is at its highest levels.

 Competition
 
The markets in which we compete are changing rapidly. We face competition from both global IT services providers as well as those based in the United States. We believe that the principal competitive factors in our business include: the ability to innovate; technical expertise and industry knowledge; end-to-end solution offerings; reputation and track record for high-quality and on-time delivery of work; effective employee recruiting; training and retention; responsiveness to clients' business needs; scale; financial stability; and price.
 
We face competition from various technology services providers such as Accenture, Atos, Capgemini, Cognizant Technology Solutions, Deloitte Digital, DXC Technology, Endava, EPAM Systems, Inc., Genpact, GlobalLogic, Grid Dynamics, HCL Technologies, Infosys, Tata Consultancy Services, and Wipro, among others. Additionally, we compete with numerous smaller local companies in the various geographic markets in which we operate.

We believe that our focus on creating software that appeals and connects emotionally with millions of consumers positions us well to compete effectively in the future. However, some of our present and potential competitors may have substantially greater financial, marketing or technical resources; may be able to respond more quickly to emerging technologies or processes and changes in client demands; may be able to devote greater resources towards the development, promotion and sale of their services than we can; and may make strategic acquisitions or establish cooperative relationships among themselves or with third parties that increase their ability to address the needs of our clients.
 
Intellectual Property
 
Our intellectual property rights are important to our business. We rely on a combination of intellectual property laws, trade secrets, confidentiality procedures and contractual provisions to protect the investment we make in research and development. We require our employees, independent contractors, vendors and clients to enter into written confidentiality agreements upon the commencement of their relationships with us. 

We customarily enter into nondisclosure agreements with our clients with respect to the use of their software systems and platforms. Our clients usually own the intellectual property in the software solutions we deliver. Furthermore, we usually grant a perpetual, worldwide, royalty-free, nonexclusive, transferable and non-revocable license to our clients to use our preexisting intellectual property, but only to the extent necessary in order to use the software solutions we deliver.
 
We have developed a number of proprietary internal tools that we use to manage our projects, build applications in specific software technologies, and assess software vulnerability.
 
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Our registered intellectual property consists of the trademark "Globant" (which is registered in twelve jurisdictions), the trademark "StarMeUp", certain other trademarks related to our service offerings and products, three software patents granted in the United States in favor of our United States subsidiary Globant, LLC, and three software patents that are granted in the United States in favor of our Spanish subsidiary Globant España S.A. We do not believe that any individual registered intellectual property right, other than our rights in our name and logo, is material to our business.
  
Facilities and Infrastructure

The table below sets forth an overview of our office locations as of December 31, 2023.

Country
Number of
Offices
Type
Square Feet
Argentina
13
Development and Delivery Center / Client Management Center
364,520
Australia1Development & Delivery Center3,520
Belarus
2
Development and Delivery Center
30,247
Brazil
6
Development and Delivery Center / Client Management Center
50,246
Canada2
Development and Delivery Center
7,567
Chile
3
Development and Delivery Center / Client Management Center
48,481
China2Client Management Center678
Colombia
7
Development and Delivery Center / Client Management Center
226,537
Costa Rica1
Development and Delivery Center
21,775
Denmark1
Development and Delivery Center / Client Management Center
12,056
Ecuador2
Development and Delivery Center
1,432
France
4
Client Management Center
13,563
Germany1
Development and Delivery Center
5,145
India
6
Development and Delivery Center
265,137
Italy4Development and Delivery Center / Client Management Center20,785
Luxembourg
1
Principal Executive Office
151
Mexico
6
Development and Delivery Center / Client Management Center
121,923
Moldova1
Development and Delivery Center
11,302
Netherlands2Client Management Center431
Peru
2
Development and Delivery Center
25,618
Poland2
Development and Delivery Center
1,206
Portugal1
Development and Delivery Center
646
Romania
7
Development and Delivery Center
49,464
Saudi Arabia1
Development and Delivery Center / Client Management Center
915
Spain
7
Development and Delivery Center / Client Management Center
31,980
United Arab Emirates1Client Management Center592
United Kingdom
1
Development and Delivery Center / Client Management Center
22,819
United States
14
Development and Delivery Center / Client Management Center
51,419
Uruguay
4
Development and Delivery Center / Client Management Center
94,077
Vietnam2
Development and Delivery Center
7,438
Total
1071,491,670 
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Regulatory Overview
 
Given the broad scope of our presence, our operations are subject to a variety of rules and regulations. Various federal and state agencies in the 30 countries in which we operate regulate different aspects of our business, including anti-corruption, internal and disclosure control obligations, data privacy and protection, wage and labor standards, employment and labor relations, trade protections, international trade controls, foreign exchange controls and other regulatory requirements affecting trade and investment. Some of the laws and regulations to which we are exposed, and their interpretation, are still evolving. The following summaries included below provide a high-level overview of the laws and regulations material to us and do not purport to address all laws and regulations that may be relevant to our operations. If we are not in compliance with applicable legal requirements, we may be subject to civil or criminal penalties and other remedial measures, which could adversely affect our business, financial condition and results of operations.

Taxation

We are subject to taxes globally, including income tax, valued-added tax, turn-over tax, etc., and are subject to certain tax incentive regimes.

Tax incentives

We benefit from certain tax incentives promulgated by the Argentine, Uruguayan and Indian governments, among others. See "Business Overview — Government Support and Incentives" and "Risk Factors Changes in the tax laws or in their interpretation or enforcement or the loss of any country-specific tax benefits could have a material adverse effect on our financial condition and results of operations".

Global Minimum Tax

The Global Minimum Tax was introduced by the Global Anti-Base Erosion (GloBE) Rules and is a key part of the two-pillar solution agreed by over 135 member jurisdictions of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (Inclusive Framework on BEPS) in October 2021.

It ensures that Multinational Entities with revenues above EUR 750 million are subject to a 15% effective minimum tax rate in each jurisdiction that operates.

Starting on January 2024, Globant will be subject to the Global Minimum Tax regulation. Some of the tax incentives that we benefit from might be adversely affected. For example, in Uruguay, where the Free Trade Zone regime benefits us with an almost full tax exemption, our Income Tax Effective Rate would increase to 15%. The extent to which different tax incentives will be affected varies significantly. In addition, countries may use the opportunity of the introduction of the OECD Global Minimum Tax to remove those tax incentives.

Income tax

Argentina

Pursuant to Income Tax Law No. 20,628 (the “ITL”), in Argentina, legal entities and branches of foreign entities are subject to a tax on their worldwide income; provided that any foreign taxes paid on income earned from activities carried out abroad can be taken as a credit against the applicable Argentine tax, to the extent that the foreign tax does not exceed the Argentine tax. Income tax is payable on the net income made in a given fiscal year. Losses incurred during any fiscal year may be carried forward and offset against taxable income obtained during the following five fiscal years. Argentine companies are taxed on their corporate income at a progressive rate ranging between 25% and 35%. Subject to net income amounts, companies are required to pay a fixed amount and a progressive rate over the surplus of the minimum base rate in their category. The amounts are adjusted annually starting on January 1, 2023, based on the variation of the consumer price index ("CPI"). Argentine entities are subject to an integral inflation adjustment tax mechanism to the extent that the CPI exceeds 100% in the 36 previous months to the closing of each relevant fiscal year. For the fiscal years beginning on or after January 1, 2021, 100% of the tax inflation adjustment (negative or positive) would be allocated by fiscal year.






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Colombia

In Colombia, national corporations, branches of foreign corporations and permanent establishments are taxed on global income. National corporations are corporations that have their principal domicile in Colombia are organized under Colombian law or that during the respective tax year or period have their effective place of management in Colombia (holding board meetings in Colombia is not sufficient to qualify as a national company). The standard corporate income tax rate for fiscal years starting on January 1, 2024 is 35%; provided that local companies cannot have an effective tax rate under 15%; if the effective tax rate, determined by means of Law No. 2277 of 2022, is less than 15%, the taxpayer must increase the tax to cover such minimum tax rate. A reduced corporate income tax rate of 20% applies to legal entities qualified as Industrial Users of Goods and/or Services in a free-trade zone, over the net income originated in export activities; if the net income does not come from exports, it will be taxed at the general tax rate of 35%. Commercial Users in a free-trade zone are subject to the general corporate income tax rate. A special reduced rate of 9% applies to certain activities that in the past had some tax benefits or exemption, such as certain services in new or refurbished hotels, eco-tourism activities and some leasing agreements with respect to housing, as well as for publishers of scientific and cultural content. Capital gains are subject to tax at a corporate income tax rate of 15%. It is assumed that the following items are considered capital gains: (a) gains on the transfer of fixed assets owned for more than two years and (b) gains resulting from the receipt of liquidation proceeds of corporations in excess of capital contributed if the corporation existed for at least two years.

Mexico

Corporations resident in Mexico are taxed on their worldwide income from all sources, including profits from business and property. A nonresident corporation in Mexico is subject to profits tax on income earned from carrying on business through a permanent establishment in Mexico and on Mexican-sourced income. Corporations are considered residents of Mexico if their principal place of management is located in Mexico. The corporate income tax rate is 30%. The income tax law recognizes the effects of inflation on the following items and transactions: (a) depreciation of fixed assets (b) cost on sales of fixed assets (c) sales of capital stock (shares) (d) monetary assets and liabilities and (e) tax loss carryforwards.

All types of corporate entities are subject to the tax applicable to Mexican corporations. Mexican transfer pricing rules are based on the OECD principles.

India

A company resident in India is subject to tax on its worldwide income, unless the income is specifically exempt. A company that does not reside in India is subject to Indian tax on Indian-sourced income and on income received in India.

Under the regular taxation regime, the standard corporate income tax rate is 30% for domestic companies. A 25% rate (plus any applicable surcharge and cess) applies for a financial year to domestic companies with total turnover or gross receipts not exceeding INR 4 billion during the specified period (generally, the financial year two years prior to the relevant financial year). A 7% surcharge applies to domestic companies with income exceeding INR 10 million and a 12% surcharge applies where income exceeds INR 100 million.

Minimum alternate tax (MAT) is imposed at a rate of 15% (plus any applicable surcharge and cess) on the adjusted book profits of corporations whose tax liability is less than 15% of their book profits.

Value-added tax

Argentina

In Argentina, the sale of goods and the provision of services, under certain circumstances, rendered outside of Argentina, which are effectively used or exploited in Argentina, and digital services rendered from abroad, are subject to VAT. The current value-added general tax rate is 21%. Certain sales and imports of goods, such as computers and other hardware, are, however, subject to a lower rate of 10.5%. Services rendered in Argentina, which are effectively used or exploited abroad, qualify as “export services” and are not subject to VAT. Law No. 27,346 creates the figure of substitute taxpayer for the payment of the tax corresponding to non-Argentine residents who render services within Argentina. Substitute taxpayers will assess and pay for applicable VAT, even in the cases in which it is impossible to withhold that tax from the non-Argentine resident.





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Colombia

In Colombia, VAT is an indirect national tax levied on (i) services rendered in Colombia and from abroad; (ii) sales and imports of physical movable goods; (iii) sales or transfers of intangible assets related to industrial property; and (iv) gambling sales and operations, except for lotteries and online gambling. As a general rule, VAT does not apply to the sale of fixed assets and export of good and services.

The general tax rate is 19%. However, some goods or services are subject to rates of 5% or 0%. VAT is not applicable when the goods/services have been expressly excluded (not taxed) or exempted (0% rate). In the case of exporters and producers of exempt goods/services, input VAT can be recovered via a tax refund.
Mexico

In Mexico VAT is levied upon the supply of goods and independent services provided in Mexico, the importation of goods and services and the grant of temporary use or the enjoyment of goods within Mexican territory.

VAT is calculated by "cash basis" for each calendar month as a definitive tax. The standard tax rate is 16%, with certain activities subject to a zero rate such as exports of goods and certain services specifically listed by the VAT law. Additionally, the value-added tax law establishes exempt transactions, such as the sale of land and the sale of shares.

India

In India, goods and services tax ("GST") is a destination-based consumption tax applicable to the supply of goods or services. GST also is a part of the aggregate customs duty imposed on imports. Exports and supplies to SEZs are zero-rated for GST purposes. Central GST ("CGST") and state GST ("SGST") are imposed simultaneously on a common tax base on all intrastate transactions. In the case of interstate supplies of goods and services, integrated GST ("IGST") applies at a rate that is an aggregate of CGST and SGST.

Goods and services are categorized under a structure with five different rates: 0%, 5%, 12%, 18%, and 28%. There is no standard rate per se, but the rate for most services is 18%.

Tax on dividends

Argentina

In Argentina, dividends resulting from profits obtained since and including fiscal year 2018 that are paid to Non-Argentine Beneficiaries or Argentine resident individuals are subject to a 7% income tax withholding on the amount of such dividends.

Colombia

In Colombia, distributions to nonresidents are subject to taxation at a rate of 20%. The dividends tax rate for resident individuals is 15%, with 1.090 Tax Units (2024: COP$53,300,850) of exempt income. No dividend tax applies to distributions to resident companies. However, a 10% income tax rate is introduced on dividends distributed between resident companies, which applies on the first distribution, with a credit for the tax passed onto the ultimate shareholder (resident individual or non-resident entity or individual). The 10% withholding is not applicable when the distribution is made between registered economic group members. The dividends tax applies to the distribution of profits generated in 2017 and onwards. In addition, if the dividend distribution is made out of profits that were not taxed at the distributing entity level, the distribution to nonresidents is subject to a 35% corporate income tax (recapture tax), which is withheld by the company who distributes the dividends. In this case, the 20% dividends tax applies on the distributed amount after it is reduced by the 35% recapture income tax. A 35% corporate income tax is imposed on dividends paid to residents (including companies and individuals) out of profits not taxed at the corporate level. If the profits subject to tax at the corporate level in a given year are higher than the commercial profits of that year, the difference can be carried back for two years or carried forward for five years to offset the profits of such periods, in order to reduce or eliminate the amount of the distribution subject to the 35% withholding tax. This carryforward or carryback should not reduce the amount of the distribution to nonresidents subject to the dividends tax of 20%.





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Mexico

Resident individuals and nonresident shareholders of a Mexican corporation are subject to a 10% income tax on dividends received that are paid out of profits generated after 2013. Dividends are not subject to corporate income tax at the distributing company level if the distribution is from previously taxed earnings and if the distributing corporation has sufficient accumulation in its “net after-tax profit” ("CUFIN") account to cover the dividend. If the dividend is in excess of the CUFIN account, then the dividend is also taxed at the distributing company level at a rate of 30% on a grossed-up basis with a gross-up factor of 1.4286.

India

    Dividends paid to an Indian resident generally are subject to a withholding tax of 10%; the rate is temporarily reduced to 7.5% for dividends paid during the period from May 14, 2020 through March 31, 2021. As of April 1, 2020, dividends paid to a nonresident are generally subject to a withholding tax of 20%. The withholding tax rates on dividends paid to nonresidents are subject to any applicable surcharge and cess and may be reduced under a tax treaty.

Prior to April 1, 2020, Indian companies were required to pay a dividend distribution tax at a rate of 15% (an effective rate of approximately 20.56%, including a 12% surcharge, and a 4% cess) on dividends declared, distributed, or paid to shareholders, and the dividend income was exempt from tax in the hands of the shareholders.

Net wealth tax

Argentina

The net wealth tax is payable on shares and other equity participation issued by an entity domiciled in Argentina that are owned either by individuals, regardless of residence, or by companies residing abroad. The tax is paid by the local company itself. The applicable rate is 0.50% on the company’s net worth. An Argentine company is entitled to seek reimbursement of such tax paid from the shareholders. The current Double Taxation Treaties (DDTs) signed by Argentina do not provide an exemption on this tax.

Foreign exchange controls

Pursuant to the regulations of the Argentine Central Bank, among others, (a) collections of foreign currency from the export of goods and services and the disbursement of foreign financial loans (to have access to the FX Market for the repayment of principal and interests), are subject to mandatory transfer into Argentina and conversion into Argentine pesos through the FX Market; (b) the prior authorization of the Argentine Central Bank is required for access to the FX Market for the purchase of foreign currency for certain purposes (e.g. payment of dividends, except under certain circumstances; pre-payment of principal and interest on indebtedness; and payments to related parties); and (c) access to the FX Market to make payments from Argentina is subject to compliance with a foreign indebtedness information regime and the filing of an affidavit stating that, among other things: (i) payor did not, and commits not to, sell Argentine securities settled against foreign currency within the preceding and following 90 days; (ii) as of the transaction date, payor does not have holdings of foreign currency in Argentina that are not deposited with Argentine financial institutions and does not have foreign liquid disposable assets for an equivalent of more than $100,000; and (iii) commits to transfer into Argentina and settle for Argentine pesos any payments received outside of Argentina under loans granted by payor or under time deposits made after May 28, 2020, or from the sale of assets.

On December 21, 2019, the Argentine congress enacted the Social Solidarity Law, pursuant to which a 30% tax was imposed on the purchase of foreign currency for portfolio purposes, the acquisition of goods and services with credit and debit cards, and any payments in connection with international passenger transportation. Digital services rendered from outside Argentina (such as hosting, web services, software as a service, streaming services, etc.) are subject to a reduced tax rate of 8.0%.

Law No. 19,359, as amended and complemented, establishes penalties for the infringement of any foreign exchange regulations. Penalties include fines of up to a tenfold increase in the amount of the infringing transaction, temporary suspensions, disqualification for up to ten years preventing the infringing party from acting as importer, exporter and/or as foreign exchange institution, or imprisonment in event of recidivism.

For additional information regarding all current foreign exchange restrictions and exchange control regulations in Argentina, investors should consult their legal advisors and read the applicable rules mentioned herein, as well as any amendments and complementary regulations, which are available at the Argentine Central Bank's website: www.bcra.gob.ar.
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Under Colombian foreign exchange regulations, payments in foreign currency related to certain foreign exchange transactions must be channeled through the commercial exchange market, by means of (i) a foreign exchange intermediary, or (ii) through compensation accounts, in both cases, declared to the Colombian Central Bank. This mechanism applies to payments in connection with, among others, imports and exports of goods, foreign loans and related financing costs, investment of foreign capital and the remittances of profits thereon, investment in foreign securities and assets and endorsements and guarantees in foreign currency. Transactions through the commercial exchange market are made at market rates freely negotiated with the authorized intermediaries.

In addition, the Colombian Central Bank may intervene in the foreign exchange market at its own discretion at any time and may, under certain circumstances, take actions that limit the availability of foreign currency to private sector companies. Notwithstanding the foregoing, the Colombian Central Bank has never taken such action since the present foreign exchange regime was implemented in 1991.

The prevailing foreign exchange laws in India, more specifically, Section 8 of the Foreign Exchange Management Act, 1999, require an Indian company to take all reasonable steps to realize and repatriate into India all foreign currency earned by the company outside India, within such time periods and in the manner specified by the Reserve Bank of India (the "RBI"). The RBI has promulgated guidelines that require Indian companies to realize and repatriate such foreign currency to India, inter alia by way of remittance into a foreign currency account such as an Exchange Earners Foreign Currency ("EEFC") account maintained with an authorized dealer in India. Remittance into an EEFC account is subject to the condition that the sum total of the accruals in the account during a calendar month should be converted into rupees on or before the last day of the succeeding calendar month, after adjusting for utilization of the balances for approved purposes or forward commitments.

Data Protection

We collect, store, process, use and transfer personal data and other sensitive information, and, therefore, we are subject to laws and regulations related to security and privacy, in addition to other numerous, and sometimes conflicting, legal requirements. We are also subject to various other laws governing the protection of privacy, health and other personally identifiable information and data privacy and cybersecurity laws in other regions. See "Risk Factors — Risks Related to Our Global Operations — Our business, results of operations and financial condition may be adversely affected by the various conflicting and/or onerous legal and regulatory obligations required in the countries where we operate" and "If we are faced with immigration or work permit restrictions in any country where we currently have personnel onsite at a client location or would like to expand our delivery footprint, then our business, results of operations and financial condition may be adversely affected".

Labor and Employment

We are subject to a variety of national and local labor laws including, employee health safety, wages and benefits laws, independent contractors regulations and outsourcing. See "Risk Factors — Risks Related to Our Global Operations — Our business, results of operations and financial condition may be adversely affected by the various conflicting and/or onerous legal and regulatory obligations required in the countries where we operate", “If we are faced with immigration or work permit restrictions in any country where we currently have personnel onsite at a client location or would like to expand our delivery footprint, then our business, results of operations and financial condition may be adversely affected” and “Risk Factors — Risks Related to Our Business and Industry — Our labor costs and the operating restrictions that apply to us could increase as a result of collective bargaining negotiations and changes in labor laws and regulations, and disputes resulting in work stoppages, strikes, or disruptions could adversely affect our business”.

C. Organizational Structure
 
On December 10, 2012, we incorporated our company, Globant S.A., as a société anonyme under the laws of the Grand Duchy of Luxembourg, as the holding company for our business. Prior to the incorporation in Luxembourg, our company was incorporated in Spain as a sociedad anónima, which we refer to as “Globant Spain” or “Spain Holdco”. As a result of the incorporation of our company in Luxembourg and certain related share transfers and other transactions, Globant Spain became a wholly-owned subsidiary of our company.
 





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The following chart is a summary of our principal subsidiaries as of February 10, 2024. You may find complete information about all of our subsidiaries and their respective holdings in Exhibit 8.1.

ITEM 4.C. Org Structure 2024 final.jpg
D. Property, Plant and Equipment
 
  
ITEM 4A. UNRESOLVED STAFF COMMENTS
 
Not applicable.
  
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
 
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and related notes included elsewhere in this annual report. Our consolidated financial statements have been prepared in accordance with IFRS. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Key Information—Risk Factors" and elsewhere in this annual report.
 
Overview  

Cybersecurity Incident

As disclosed in our Report of Foreign Private Issuer furnished to the US Securities and Exchange Commission on March 30, 2022, on March 28, 2022, we detected suspicious activity on our network later determined to be unauthorized access to and exfiltration of certain source code and project-related documentation for certain clients, as well as certain data files. As soon as such access was detected, we activated our security protocols and promptly notified affected clients. In addition, we engaged a third-party firm to conduct a forensic investigation. The forensic investigation was finalized in August 2022 and we concluded that the number of affected clients was limited. In accordance with applicable regulations, we notified relevant data privacy authorities of the incident. In addition, we have implemented a variety of measures to further enhance our cybersecurity protections. To date this incident has not had a material impact on our operations, and we are unaware of any material impact on our clients’ operations.








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A. Operating Results
 
Factors Affecting Our Results of Operations
 
Over the last few years, the simultaneous digital and cognitive revolutions have transformed the technology industry, reshaped how companies connect with consumers and employees, and created opportunities for gains in efficiency. Today's technology users move quickly and demand personalized and frictionless experiences through always-available digital ecosystems. Increased demand for more intelligent and human-like technology is contributing to changes in the industry. To address user demands, companies are leveraging AI, UX, Mobile, Cloud, VR and other technologies.

We believe that the most significant factors affecting our results of operations include:
 
market demand for integrated engineering, design and innovation technology services relating to emerging technologies and related market trends;
economic conditions in the industries and countries in which our clients operate and their impact on our clients' spending on technology services;
our ability to continue to innovate and remain at the forefront of emerging technologies and related market trends;
expansion of our service offerings and success in cross-selling new services to our clients;
our ability to obtain new clients, increase penetration levels with our existing clients and continue to add value for our existing clients so as to create long-term relationships;
the availability of, and our ability to attract, retain and efficiently utilize, skilled IT professionals in 30 countries where we are present;
operating costs in countries where we operate;
capital expenditures related to the opening of new delivery centers and client management locations and improvement of existing offices;
our ability to increase our presence onsite at client locations;
the effect of wage inflation in countries where we operate and the variability in foreign exchange rates, especially relative changes in exchange rates between the U.S. dollar and the Argentine peso, Uruguayan peso, Mexican peso, Colombian peso, Chilean peso and Brazilian real; and
our ability to identify, integrate and effectively manage businesses that we may acquire.

Our results of operations in any given period are directly affected by the following additional company-specific factors: 

Pricing of, and margin on, our services and revenue mix. For time-and-materials contracts, the hourly rates we charge for our Globers are a key factor impacting our gross profit margins and profitability. Hourly rates vary by complexity of the project and the mix of staffing. The margin on our services is impacted by the increase in our costs in providing those services, which is influenced by wage inflation, market conditions and other factors. As a client relationship matures and deepens, we seek to maximize our revenues and profitability by expanding the scope of services offered to that client and achieving higher profit margin assignments. During the three-year period ended December 31, 2023, we increased our revenues attributable to sales of technology solutions (primarily through digital transformation, data and cloud strategies). Gross profit margin was 36.1%, 37.6% and 38.2% for the years ended December 31, 2023, 2022 and 2021, respectively and adjusted gross profit margin was 38.1%, 39.2% and 39.5% for the years ended December 31, 2023, 2022 and 2021, respectively.

Our ability to deepen and expand the portfolio of services we offer while maintaining our high standard of quality. The breadth and depth of the services we offer impact our ability to grow revenues from new and existing clients. Through research and development, targeted hiring and strategic acquisitions, we have invested in broadening and deepening the domains of expertise of our Studios. Our future growth and success depend significantly on our ability to maintain the expertise of each of our Studios, to continue to innovate and to anticipate the needs of our clients and rapidly develop and maintain the expertise of each of our Studios, including relevant domain knowledge and technological capabilities required to meet those client needs, while maintaining our high standard of quality.

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Our ability to recruit, retain and manage our IT professionals may have an effect on our gross profit margin and our results of operations. Our IT professional headcount was 27,116 as of December 31, 2023, 25,331 as of December 31, 2022 and 22,167 as of December 31, 2021. We manage employee headcount and utilization based on ongoing assessments of our project pipeline and requirements for professional capabilities. An unanticipated termination of a significant project could cause us to experience lower employee utilization resulting from a higher than expected number of idle IT professionals. Our ability to effectively utilize our employees is typically improved by longer-term client relationships due to increased predictability of client needs over the course of the relationships.

Investments in our delivery platform. See “Information on the Company — Business overview. — Facilities and Infrastructure.” Our integrated global delivery platform allows us to deliver our services through a blend of onsite and offsite methods. We have pursued a decentralization strategy in building our network of delivery centers, recognizing the benefits of expanding into countries in Latin America and Asia, including the ability to attract and retain highly skilled IT professionals in increasing scale. Our ability to effectively utilize our robust delivery platform could significantly affect our results of operations in the future.


Our results of operations are expected to benefit from government policies and regulations designed to foster the software industry in Argentina, primarily under the Software Promotion Law. For further discussion of the Software Promotion Law, see "Information of the Company - Business Overview — Government Support and Incentives."
 
Certain Income Statement Line Items

2023 Compared to 2022
 
Revenues
 
Revenues are derived primarily from providing technology services to our clients, which are medium to large-sized companies globally. For the year ended December 31, 2023, revenues increased by 17.7% to $2.1 billion from $1.8 billion for the year ended December 31, 2022.
  
We discuss below the breakdown of our revenues by contract type, client location, industry vertical and client concentration. Revenues consist of technology services revenues and reimbursable expenses, which primarily include travel and out-of-pocket costs that are billable to clients.


Revenues by Contract type

We perform our services primarily under time-and-material contracts and, to a lesser extent, fixed-price contracts. The remaining portion of our revenues in each year was derived from other types of contracts.

 Year ended December 31,
 20232022
 (in thousands, except percentages)
By Contract
Time & Materials$1,654,280 78.9 %$1,475,848 82.9 %
Fixed Price383,867 18.3 %273,344 15.4 %
Licenses, resales & Others57,792 2.8 %31,051 1.7 %
Revenues$2,095,939 100.0 %$1,780,243 100.0 %
 
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Revenues by Client Location
 
Our revenues are sourced from the following four regions: North America (top markets: the United States and Canada), Latin America (top markets: Argentina and Chile), Europe, Middle East & Africa (top markets: Spain and United Kingdom) and Asia & Oceania (top markets: India and Japan). We present our revenues by client location based on the location of the specific client site that we serve, irrespective of the location of the headquarters of the client or the location of the delivery center where the work is performed. For the year ended December 31, 2023, we had 1,610 customers with more than ten thousands U.S. dollars in revenue in the last twelve months.

The following table sets forth revenues by client location by amount and as a percentage of our revenues for the years indicated:  
 Year ended December 31,
 20232022
 (in thousands, except percentages)
By Geography
North America$1,245,972 59.5 %$1,135,148 63.8 %
Latin America463,223 22.1 %408,354 22.9 %
Europe, Middle East & Africa323,546 15.4 %186,723 10.5 %
Asia & Oceania63,198 3.0 %50,018 2.8 %
Revenues$2,095,939 100.0 %$1,780,243 100.0 %

Revenues by Industry Vertical
 
We are a provider of technology services to enterprises in a range of industry verticals including media and entertainment, banks, financial services and insurance, and consumer, retail and manufacturing, among others. The following table sets forth our revenues by amount and as a percentage of our revenues by industry vertical for the periods indicated: 

 Year ended December 31,
 20232022
 (in thousands, except percentages)
By Industry Vertical
Media and Entertainment$454,380 21.7 %$376,134 21.1 %
Banks, Financial Services and Insurance385,207 18.4 %359,940 20.2 %
Consumer, Retail & Manufacturing351,880 16.8 %254,500 14.3 %
Professional Services261,233 12.5 %235,553 13.2 %
Technology & Telecommunications255,238 12.2 %250,299 14.1 %
Travel & Hospitality187,346 8.9 %139,170 7.8 %
Health Care167,705 8.0 %128,669 7.2 %
Other Verticals32,950 1.5 %35,978 2.1 %
Total$2,095,939 100.0 %$1,780,243 100.0 %
 
The Media and Entertainment industry vertical, our largest industry vertical, energized by digital consumption trends at our biggest client and our efforts in the Sports and Entertainment segment, resulting in positive yearly revenue expansion. Our Banks, Financial Services, and Insurance industry vertical grew due to our exposure to large global financial institutions across many units and geographies. The Consumer, Retail, and Manufacturing industry vertical, experienced revenue growth as companies in such industry continued to invest in their digital transformation efforts. The Travel and Hospitality industry vertical revenue growth was supported by innovative partnerships and a resurgence in global mobility. The Professional Services industry vertical segment increased on the back of a wide range of technology solutions and consulting services aimed at helping companies to modernize their operations, improve efficiency and enhance customer experiences. The Technology and Telecommunications industry vertical, following a period of moderate expansion in the first half of the year, has stabilized in the second half, reflecting the essential demand of our services in a world increasingly reliant on digital technology. Lastly, our Healthcare industry vertical also showed strong growth, demonstrating our focus on using technology to improve healthcare delivery, enhance clinical outcomes for patients, and incorporate preventive care practices. Other industry verticals experienced a slight decrease, attributed to the completion of one-off projects in the education industry during 2023.



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Revenues by Client Concentration
 
We have increased our revenues by expanding the scope and size of our engagements, and we have grown our key client base primarily through our business development efforts and referrals from our existing clients.
 
The following table sets forth revenues contributed by our largest client, top five clients, top ten clients and top twenty clients by amount and as a percentage of our revenues for the years indicated:
 
 Year ended December 31,
 20232022
 (in thousands, except percentages)
Client concentration
Top client$183,207 8.7 %$191,191 10.7 %
Top five clients480,751 22.9 %456,217 25.6 %
Top ten clients670,907 32.0 %633,150 35.6 %
Top twenty clients877,926 41.9 %812,419 45.6 %
 
Our top ten customers for the year ended December 31, 2023 have been working with us for, on average, eleven years.

An increase in revenues from our top ten clients in 2023 reflects our ability to increase the scope of our engagement with our main customers.
 
Our focus on delivering quality to our clients is reflected in the fact that existing clients from 2022 contributed 89.6% of our revenues in 2023. As evidence of the increase in scope of engagement within our client base, the number of clients that each accounted for over $5.0 million of our annual revenues increased (80 in 2023 and 65 in 2022) and the number of clients that each accounted for at least $1.0 million of our annual revenues increased to 311 in 2023 from 259 in 2022. The following table shows the distribution of our clients by revenues for the year presented:
 
 Year ended December 31,
 20232022
Over $5 Million80 65 
$1 - $5 Million231 194 
$0.5 - $1 Million155 132 
$0.1 - $0.5 Million465 386 
Less than $0.1 Million (*)679 472 
Total Clients (*)1,610 1,249 
(*) Represents customers with more than $0.01 million in revenue during the last twelve months.

The volume of work we perform for specific clients is likely to vary from year to year, as we are typically not any client's exclusive external technology services provider, and a major client in one year may not contribute the same amount or percentage of our revenues in any subsequent year.
 
Cost of Revenues
 
The principal components of our cost of revenues are salaries, professional services and share-based compensation plans (equity settled). Included in salaries are base salary, incentive-based compensation, employee benefits costs and social security taxes. Salaries of our IT professionals are allocated to cost of revenues regardless of whether they are actually performing services during a given period.
 
Also included in cost of revenues is the portion of depreciation and amortization expense attributable to the portion of our property and equipment, right of use assets and intangible assets utilized in the delivery of services to our clients.
 
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Our cost of revenues has increased in recent years in line with the growth in our revenues and reflects the expansion of our operations in Argentina, Brazil, Chile, Colombia, India, Mexico, Peru, Spain, United States and Uruguay primarily due to increases in salary costs, an increase in the number of our IT professionals and the opening of new delivery centers. We expect that as our revenues grow, our cost of revenues will increase. Our goal is to increase revenue per IT professional and thereby increase our gross profit margin.

During 2023, our cost of revenues also increased due to the appreciation of the COP, MXN and BRL among others.

Cost of revenues was $1,340.2 million for 2023, representing an increase of $229.2 million, or 20.6%, from $1,110.8 million for 2022.

 Year ended December 31,
 20232022
 (in millions, except percentages)
AmountVariationAmountVariation
Main variations in cost of revenues
Salaries, employee benefits and social security taxes$(1,158.7)14.2 %$(1,014.5)36.1 %
Professional services(104.9)181.3 %(37.3)55.5 %
Share-based compensation expense - Equity settled(15.2)208.2 %(4.9)37.8 %

The increase in salaries, employee benefits and social security taxes is primarily attributable to the net addition of 1,785 IT professionals since December 31, 2022, an increase of 7.0%, to satisfy growing demand for our services, which translated into an increase in salaries. The increase in professional services is mainly attributable to the increase in contractor services related to business growth and software subscriptions. The increase in share-based compensation plans relates to new grants of restricted stock units ("RSU's") and performance-based restricted stock units ("PRSU's"), and the increase of market share price.

Cost of revenues as a percentage of revenues increased to 63.9% for 2023 from 62.4% for 2022.

Selling, General and Administrative Expenses
 
Selling, general and administrative expenses represent expenses associated with promoting and selling our services and include such items as salary of our senior management, administrative personnel and sales and marketing personnel, infrastructure costs, legal and other professional services expenses, travel costs and other taxes. Included in salaries are base salary, incentive-based compensation, employee benefits costs and social security taxes.
 
Also included in selling, general, and administrative expenses is the portion of depreciation and amortization expense attributable to the portion of our property and equipment, right-of-use assets and intangible assets utilized in our sales and administration functions.

Selling, general and administrative expense was $537.1 million for 2023, representing an increase of $80.8 million, or 17.7%, from $456.3 million for 2022.

 Year ended December 31,
 20232022
 (in millions, except percentages)
AmountVariationAmountVariation
Main variations in Selling, General and Administrative Expenses
Salaries, employee benefits and social security taxes $(212.4)22.4 %$(173.5)24.6 %
Professional services(49.9)23.1 %(40.5)31.1 %
Depreciation and amortization expense(81.8)38.3 %(59.2)29.5 %

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The increase of salaries, employee benefits, social security taxes and share based compensation was primarily attributable to the addition of sales and management executives. There was also an increase of $22.6 million in depreciation and amortization related mainly to the intangibles recognized for the business combinations made during 2023, 2022 and 2021. In addition, there was a $9.4 million increase in professional services related to consulting tax matters and legal and audit fees, also increase in subscriptions and license expenses and the impact of the acquired companies during 2023.

Selling, general and administrative expenses as a percentage of revenues was 25.6% for both 2023 and for 2022.
 
Our selling, general and administrative expenses have increased primarily as a result of our expanding operations and the build-out of our senior and mid-level management teams to support our growth. We expect our selling, general and administrative expenses to continue to increase in absolute terms as our business expands. However, as a result of our management and infrastructure investments, we believe our platform is capable of supporting the expansion of our business without a proportionate increase in our selling, general and administrative expenses, resulting in gains in operating leverage.
 
Depreciation and Amortization Expense (included in "Cost of Revenues" and "Selling, General and Administrative Expenses")
 
Depreciation and amortization expense consists primarily of depreciation of our property and equipment (primarily leasehold improvements, servers and other equipment), depreciation of right-of-use assets (primarily office spaces and office equipment) and amortization of our intangible assets (mainly software licenses, acquired intangible assets and internal developments). We expect that depreciation and amortization expense will continue to increase as we open more delivery centers and client management locations.

Net impairment losses on financial assets
 
Net impairment losses on financial assets mainly include impairment of trade receivables, which represents an allowance for expected credit losses. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition. During the years ended December 31, 2023 and 2022, we recorded a loss of $18.8 million and $6.4 million, respectively, related to the recognition of the allowance for expected credit losses.

The increase of the allowance for expected credit losses was mainly attributable to the impact of factors that are specific to debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
Finance Income
 
Finance income consists of interest gains on time deposits, financed customers and savings accounts. The increase of finance income up to $4.8 million for the year ended December 31, 2023 from $2.8 million for the year ended December 31, 2022 was primarily attributable to accrued interests from savings accounts.

Finance Expense
 
Finance expense includes the interests from borrowings, leases contracts, banking fees and other finance expenses. The increase of finance expense up to $23.8 million for the year ended December 31, 2023 from $16.6 million for the year ended December 31, 2022 was due to an increase in interest on lease liabilities and borrowings interests.

Other Financial Results, Net

Other financial results, net consists of foreign exchange gain or loss on monetary assets and liabilities denominated in currencies other than the U.S. dollar, gain or loss on transactions with bonds, interest rate swaps, foreign exchange forward contracts and future contracts, mutual funds and T-Bills.

Other financial results, net increased to a $11.3 million gain for the year ended December 31, 2023 from a $0.2 million gain for the year ended December 31, 2022, primarily reflecting a foreign exchange loss of $22.0 million compared to a loss of $6.7 million in 2022, a gain of $23.6 million net related to gain from financial assets measured at fair value through profit or loss compared to a loss of $7.5 million in 2022 and a gain on transactions with bonds of $9.2 million compared to a gain of $13.9 million in 2022.



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Other Income and Expenses, Net
 
Other income and expenses, net increased to a gain of $6.6 million for the year ended December 31, 2023 from a loss of $0.4 million for the year ended December 31, 2022. Such increase is mainly explained by the remeasurement of contingent consideration related to the business combinations. 

Income Tax Expense
 

Income tax expense amounted to $39.5 million for 2023, a decrease of $3.9 million from a $43.4 million income tax expense for 2022. Our effective tax rate (calculated as income tax gain or expense divided by the profit before income tax) decreased to 20.0% for 2023 from 22.5% for 2022. The decrease in income tax expense as well as the effective tax rate was driven primarily by tax efficiencies and the inflation effect in Argentina.

Net Income for the Year
 
As a result of the foregoing, we had a net income of $158.5 million for 2023, compared to $149.5 million for 2022.

2022 Compared to 2021

For discussion related to our financial condition, changes in financial condition, and the results of operations for 2022 compared to 2021, refer to Part I, Item 5. Operating and Financial Review and Prospects, in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, which was filed with the SEC on February 28, 2023.

Reconciliation of Non-IFRS Financial Data

Overview

To supplement our financial measures prepared in accordance with IFRS, we use certain non-IFRS financial measures including (i) adjusted diluted earnings per share ("EPS"), (ii) adjusted net income, (iii) adjusted gross profit, (iv) adjusted selling, general and administrative ("SG&A") expenses, and (v) adjusted profit from operations. These measures do not have any standardized meaning under IFRS, and other companies may use similarly titled non-IFRS financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-IFRS financial measures may not be comparable to similar non-IFRS measures presented by other companies. We caution investors not to place undue reliance on such non-IFRS measures, but instead to consider them with the most directly comparable IFRS measures. Non-IFRS financial measures have limitations as analytical tools and should not be considered in isolation. They should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with IFRS.

The reconciliations of these non-IFRS measures to the most directly comparable financial measures calculated and presented in accordance with IFRS are shown in the tables below. We use these non-IFRS measures in the evaluation of our performance and our consolidated financial results. We believe these non-IFRS measures may be useful to investors in their assessment of our operating performance and the valuation of our company. In addition, these non-IFRS measures address questions we routinely receive from analysts and investors and, in order to assure that all investors have access to similar data, we have determined that it is appropriate to make this data available to all investors.

Adjusted Gross Profit and Adjusted SG&A Expenses

We utilize non-IFRS measures of adjusted gross profit and adjusted SG&A expenses as supplemental measures for period-to-period comparisons. Adjusted gross profit and adjusted SG&A expenses are most directly comparable to the IFRS measures of gross profit and selling, general and administrative expenses, respectively. Our non-IFRS measures of adjusted gross profit and adjusted SG&A expenses exclude the impact of certain items, such as depreciation and amortization expense, share-based compensation expense and, only with respect to adjusted SG&A expenses, acquisition-related charges and COVID-19 related charges.



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Adjusted Profit from Operations

We utilize the non-IFRS measure of adjusted profit from operations as a supplemental measure for period-to-period comparisons. Adjusted profit from operations is most directly comparable to the IFRS measure of profit from operations. Adjusted profit from operations excludes the impact of certain items, such as share-based compensation expense, acquisition-related charges and COVID-19 related charges.

Adjusted Diluted EPS and Adjusted Net Income

We utilize non-IFRS measures of adjusted diluted EPS and adjusted net income for strategic decision making, forecasting future results and evaluating current performance. Adjusted diluted EPS and adjusted net income are most directly comparable to the IFRS measures of EPS and net income, respectively. Our non-IFRS measures of adjusted diluted EPS and adjusted net income exclude the impact of certain items, such as acquisition-related charges, impairment of assets, net of recoveries, share-based compensation expense, COVID-19 related charges and the tax effects of non-IFRS adjustments.
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 Year ended December 31,
 202320222021
Reconciliation of adjusted gross profit   
Gross profit$755,761 $669,395 $494,988 
Adjustments
Depreciation and amortization expense28,597 23,312 14,122 
Share-based compensation expense - Equity settled15,155 4,917 3,568 
Adjusted gross profit$799,513 $697,624 $512,678 
Reconciliation of adjusted selling, general and administrative expenses
Selling, general and administrative expenses$(537,075)$(456,324)$(343,004)
Adjustments
Depreciation and amortization expense85,584 62,822 48,796 
Share-based compensation expense - Equity settled57,016 50,296 35,831 
Acquisition-related charges, net (1)
21,092 13,612 12,860 
Adjusted selling, general and administrative expenses$(373,383)$(329,594)$(245,517)
Reconciliation of adjusted profit from operations
Profit from operations$198,962 $206,707 $144,433 
Adjustments
Share-based compensation expense - Equity settled72,171 55,213 39,399 
Acquisition-related charges, net (1)
46,993 27,456 28,271 
COVID-19 related charges (2)
— — 2,228 
Adjusted profit from operations$318,126 $289,376 $214,331 
Reconciliation of adjusted net income for the year
Net income for the year$158,538 $148,891 $96,065 
Adjustments
Share-based compensation expense - Equity settled72,099 55,213 39,399 
Acquisition-related charges, net (1)
48,205 28,765 35,465 
COVID-19 related charges (2)
— — 2,228 
Tax effects of non-IFRS adjustments(28,724)(15,146)(14,748)
Adjusted net income for the year$250,118 $217,723 $158,409 
Calculation of adjusted diluted EPS
Adjusted net income250,118 217,723 158,409 
Diluted shares43,594 42,855 42,076 
Adjusted diluted EPS 5.74 5.08 3.76 
Other data:
Adjusted gross profit 799,513 697,624 512,678 
Adjusted gross profit margin percentage 38.1 %39.2 %39.5 %
Adjusted selling, general and administrative expenses (373,383)(329,594)(245,517)
Adjusted selling, general and administrative expenses margin percentage(17.8)%(18.5)%(18.9)%
Adjusted profit from operations 318,126 289,376 214,331 
Adjusted profit from operations margin percentage 15.2 %16.3 %16.5 %
Adjusted net income for the year 250,118 217,723 158,409 
Adjusted net income margin percentage for the year
11.9 %12.2 %12.2 %
(1) Acquisition-related charges include, when applicable, amortization of purchased intangible assets included in depreciation and amortization expense line on our consolidated statements of comprehensive income, interest charges on acquisition-related indebtedness, external deal costs, acquisition-related retention bonuses, integration costs, changes in the fair value of contingent consideration liabilities, charges for impairment of acquired intangible assets and other acquisition-related costs.
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(2) COVID-19 related expenses include, when applicable, bad debt provision related to the effect of the COVID-19 pandemic on our clients’ businesses, donations and other expenses directly attributable to the pandemic that are both incremental to expenses incurred prior to the outbreak and not expected to recur once the crisis has subsided and operations return to normal and clearly separable from normal operations. Moreover, these expenses also include rent concessions that we were granted due to the pandemic environment.

The comparison of these non-IFRS measures to the most directly comparable financial measures calculated and presented in accordance with IFRS are:

IFRS Gross Profit Margin for the full year 2023 was 36.1% compared to 37.6% and 38.2% for the full year 2022 and 2021, respectively.

Non-IFRS Adjusted Gross Profit Margin for the full year 2023 was 38.1% compared to 39.2% and 39.5% for the full year 2022 and 2021, respectively.

IFRS Profit from Operations Margin for the full year 2023 was 9.5% compared to 11.6% and 11.1% for the full year 2022 and 2021, respectively.

Non-IFRS Adjusted Profit from Operations Margin for the full year 2023 was 15.2% compared to 16.3% and 16.5% for the full year 2022 and 2021, respectively.

IFRS Diluted EPS for the full year 2023 was $3.64 compared to $3.47 and $2.28 for the full year 2022 and 2021, respectively.

Non-IFRS Adjusted Diluted EPS for the full year 2023 was $5.74 compared to $5.08 and $3.76 for the full year 2022 and 2021, respectively.

B. Liquidity and Capital Resources
 
Capital Resources
 
Our primary sources of liquidity are cash flows from operating activities. For the year 2023, we derived 81.6% of our revenues from clients in North America and Latin America pursuant to contracts that are entered into by our subsidiaries located in the United States, Argentina, Chile, Mexico, Brazil, Canada, Peru and Colombia.

Our primary cash needs are for capital expenditures (consisting of additions to property and equipment and to intangible assets) and working capital. We may also require cash to fund acquisitions of businesses.

Our primary working capital requirements are to finance our payroll-related liabilities during the period from delivery of our services through invoicing and collection of trade receivables from clients.
 
We incur capital expenditures to open new delivery centers, for improvements to existing delivery centers, for infrastructure-related investments, and to acquire software licenses and internal developments.
 
Based on the above considerations, management is of the opinion that we have sufficient funds to meet our working capital and capital expenditure needs for at least the next twelve months from the date of this report. However, our future capital requirements may be materially different than those currently planned in our budgeting and forecasting activities and depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, the acquisition of other companies, global economic conditions and the retention of customers. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our shareholders, while the incurrence of debt financing would result in debt service obligations. Such debt instruments also could introduce covenants that might restrict our operations. We cannot assure you that we could obtain additional financing on favorable terms, or at all.

We will continue to invest in our subsidiaries. In the event of any repatriation of funds or declaration of dividends from our subsidiaries, there will be a tax effect because dividends from certain foreign subsidiaries are subject to taxes. See "Additional Information — Taxation".



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The following table sets forth our historical capital expenditures for the years ended December 31, 2023 and 2022: 
 Year ended December 31,
 20232022
 (In thousands)
Total fixed assets acquisitions$34,008 $54,482 
Total intangible assets acquisitions116,638 129,904 
Additions related to business combinations(40,182)(84,538)
Total Capital Expenditures110,464 99,848 

Investments
 
During 2022, we invested $99.8 million in capital expenditures primarily made to complete or develop our works on our delivery centers in Argentina: Buenos Aires and Tandil; India: Pune; and United Kingdom: London. Additionally, we invested $46.7 million mainly in internal developments and acquired licenses.

During 2023, we invested $110.5 million in capital expenditures, consisting of $79.8 million in internal developments and acquired licenses, and the remaining to complete or develop our works on our delivery centers in Argentina: Buenos Aires, Brazil: Sao Paulo, Chile: Santiago, Colombia: Medellin, Costa Rica: San Jose; India: Pune and Indore; Peru: Lima and Romania: Cluj.

Business Combinations

During 2022, we entered into several share purchase agreements to expand our service offering and capacity. Our business combinations activity resulted in cash outflows of $126 million. The fair value of the consideration recognized in our financial statements amounted to $54.7 million, based on target achievements and price adjustments. See note 26 to our audited consolidated financial statements.

During 2023, we entered into several share purchase agreements to expand our service offering and capacity. Our business combinations activity resulted in cash outflows of $254 million. The fair value of the consideration recognized in our financial statements amounted to $95.2 million, based on target achievements and price adjustments. See note 26 to our audited consolidated financial statements.

As of December 31, 2023, we had cash and cash equivalents and current investments of $323.3 million.
 
Cash Flows
 
The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated:
 For the year ended December 31,
 20232022
(In thousands)
Net cash provided by operating activities$318,524 $197,524 
Net cash used in investing activities(350,361)(269,304)
Net cash provided by (used in) financing activities44,530 (65,680)
Cash and cash equivalents at beginning of the year292,457 427,804 
Cash and cash equivalents at end of the year 305,150 290,344 
Net increase (decrease) in Cash and cash equivalents at end of year12,693 (137,460)

Operating Activities
 
Net cash provided by operating activities was generated primarily by profits before taxes adjusted for non-cash items, including depreciation and amortization expense, shared-based compensation expense and the effect of working capital changes.
 
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Net cash provided by operating activities was $318.5 million for the year ended December 31, 2023, as compared to net cash provided in operating activities of $197.5 million for the year ended December 31, 2022. This increase of $121.0 million in net cash provided by operating activities was primarily attributable to a $49.4 million increase in profit before income tax expense adjusted for non-cash-items, a $66.0 million decrease in working capital, a $1.5 million decrease in the utilization of provision for contingencies and a $4.1 million decrease in income tax payments.
 
Changes in working capital in the year ended December 31, 2023 consisted primarily of a $44.3 million increase in trade receivables, a $16.6 million decrease in other receivables, a $10.0 million increase in other assets, a $19.0 million increase in trade payables, a $1.7 million decrease in tax liabilities, and $37.4 million decrease in payroll and social security taxes payable. The $44.3 million increase in trade receivables reflects our revenue growth. The $16.6 million decrease in other receivables was mainly related to the decrease in tax credits. The payroll and social security taxes payable decrease of $37.4 was primarily related to depreciation of Argentine pesos, anticipated payment of salaries and decrease in bonuses accruals.

 For discussion related to cash flows from operating activities during 2022 compared to 2021, refer to Part I, Item 5. Liquidity and Capital Resources, in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, which was filed with the SEC on February 28, 2023.

Investing Activities
 
Net cash of $350.4 million was used in investing activities for the year ended December 31, 2023, as compared to $269.3 million of net cash used in investing activities during the year ended December 31, 2022. During the year ended December 31, 2023, we received $38.4 million in mutual funds, T-bills and commercial papers, we invested $126.5 million in fixed and intangible assets, $271.7 million in acquisition-related transactions, and we received $9.5 million related to future and forward contracts.
 
 For discussion related to cash flows from investing activities during 2022 compared to 2021, refer to Part I, Item 5. Liquidity and Capital Resources, in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, which was filed with the SEC on February 28, 2023.

Financing Activities
 
Net cash of $44.5 million was provided by financing activities for the year ended December 31, 2023, as compared to $65.7 million of net cash used in financing activities for the year ended December 31, 2022. During the year ended December 31, 2023, we received $1.8 million for the issuance of shares under our share-based compensation plan. Additionally, during the year ended December 31, 2023 we received $119.7 million net of borrowings, we paid $44.8 million of lease liabilities, $28.3 million in acquisition-related transactions and $3.9 million of put option to acquire non-controlling interest.

For discussion related to cash flows from financing activities during 2022 compared to 2021, refer to Part I, Item 5. Liquidity and Capital Resources, in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, which was filed with the SEC on February 28, 2023.  

Future Capital Requirements
 
Our ability to generate cash is subject to our performance, general economic conditions, industry trends and other factors. If our cash and cash equivalents and operating cash flow are insufficient to fund our future activities and requirements, we may need to raise additional funds through public or private equity or debt financing. If we issue equity securities in order to raise additional funds, substantial dilution to existing shareholders may occur. If we raise cash through the issuance of indebtedness, we may be subject to additional contractual restrictions on our business. We cannot assure you that we would be able to raise additional funds on favorable terms or at all.

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On February 6, 2020, Globant, LLC entered into the Second A&R Credit Agreement (as amended in October 2021), pursuant to which we may borrow (i) up to $100 million in up to four borrowings on or prior to April 1, 2022 under a delayed-draw term loan facility and (ii) up to $250 million under a revolving credit facility. In addition, we may request increases of the maximum amount available under the revolving facility in an aggregate amount not to exceed $100 million. The maturity date of each of the facilities is February 5, 2025. Pursuant to the terms of the Second A&R Credit Agreement, interest on the loans extended thereunder shall accrue at a rate per annum equal to either (i) LIBOR plus 1.50%, or (ii) LIBOR plus 1.75%, determined based on our Maximum Total Leverage Ratio (as defined in the Second A&R Credit Agreement). Globant, LLC’s obligations under the Second A&R Credit Agreement are guaranteed by the Company and its subsidiary, Globant España S.A., and are secured by substantially all of Globant, LLC’s now owned and after-acquired assets. The Second A&R Credit Agreement also contains certain customary negative and affirmative covenants, which compliance may limit our flexibility in operating our business and our ability to take actions that might be advantageous to us and our shareholders.

On June 2, 2022 we entered into a Third Amended and Restated Credit Agreement with HSBC, pursuant to which the LIBOR rate was replaced by a Secured Overnight Financing Rate ("SOFR") plus 0.10%.

On May 31, 2023, we entered into a Fourth Amended and Restated Credit Agreement (the "Credit Agreement") with HSBC, pursuant to which, we may borrow up to $725 million under a revolving credit facility. In addition, we may request increases of the maximum amount available under the revolving facility, and may request term loan tranches, in an aggregate amount not to exceed $350 million plus additional amounts, so long as the Maximum Net Leverage Ratio (as defined in the Credit Agreement) does not exceed 3.00 to 1.00 after giving effect thereto. The maturity date of each loan is May 30, 2028. Interest on the loans will accrue at a rate per annum equal to either (i) SOFR plus 0.10% plus between 1.25% and 1.875%, or (ii) the Alternate Base Rate (as defined in the Credit Agreement) plus between 0.25% and 0.875%, at our option. Undrawn commitment under the revolving credit facility are subject to a commitment fee at a rate per annum of 0.15% to 0.25%. The applicable margin and the commitment fee rate will be determined quarterly based upon the Maximum Net Leverage Ratio. Globant, LLC’s obligations under the Credit Agreement are guaranteed by the Company, its subsidiary, Globant España S.A., and Globant, LLC’s subsidiary Globant IT Services Corp. (the “Subsidiary Guarantor”), and are secured by substantially all of Globant, LLC’s and the Subsidiary Guarantor’s now owned and after-acquired assets. The Credit Agreement also contains certain customary negative and affirmative covenants, which compliance may limit the flexibility of the Company in operating its business and its ability to take actions that might be advantageous to the Company and its shareholders. We are required to comply with two financial maintenance covenants, which are tested quarterly: (i) a minimum interest coverage ratio of 3.00 to 1.00 and (ii) a Maximum Net Leverage Ratio of 3.50 to 1.00.

Contractual Obligations

Set forth below is information concerning our fixed and determinable contractual obligations as of December 31, 2023 and the effect such obligations are expected to have on our liquidity and cash flows.  

Payments due by period (in thousands)
202420252026ThereafterTotal
Trade payables$124,545 $1,585 $686 $710 $127,526 
Borrowings157,654 738 715 — 159,107 
Lease liabilities48,389 35,102 24,037 66,392 173,920 
Other financial liabilities (1)
80,170 90,383 42,051 30,411 243,015 
TOTAL$410,758 $127,808 $67,489 $97,513 $703,568 

(1) The amounts disclosed in the line of other financial liabilities do not include foreign exchange forward contracts, equity forward contracts and 57,849 related to business combinations payments through subscription agreements. See note 26 to our audited consolidated financial statements.

Appropriation of Retained earnings under Subsidiaries' local Laws and restrictions on distribution of dividends by certain Subsidiaries
 
The ability of certain of our subsidiaries to pay dividends to us is subject to their satisfaction of requirements under local law to set aside a portion of their net income in each year to legal reserves, as well as subject to certain tax restrictions. Please refer to note 31 of our audited consolidated financial statements for further information.


 
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Equity Compensation Arrangements
  
On July 3, 2014, our board of directors and shareholders approved and adopted the 2014 Equity Incentive Plan, which was amended on May 9, 2016, February 13, 2019, May 18, 2021 and June 8, 2022. Pursuant to the June 8, 2022 amendment adopted by our board of directors, we may issue stock awards up to an aggregate amount of 5,666,667 common shares under the 2014 Equity Incentive Plan.

From the date of the 2014 Equity Incentive Plan's adoption, we have granted to members of our senior management and certain other employees options to purchase common shares and restricted stock units ("RSUs"). On September 27, 2021, our compensation committee adopted and approved the granting of performance-based restricted stock units ("PRSUs"). Until 2022, restricted stock units were granted between 40% and 50% in the form of PRSUs and between 50% and 60% in the form of RSUs, and from 2022 all PRSUs and RSUs are granted on a 50% basis each.

Each of our employee share options is exercisable for one of our common shares, and each of our RSUs and PRSUs will be settled, automatically upon its vesting, with one of our common shares. No amounts are paid or payable by the recipient upon receipt of an option, RSU or PRSU. Neither the options, nor the RSUs or PRSUs carry rights to dividends or voting rights. Options may be exercised at any time from the date of vesting to the date of their expiration (ten years after the grant date). Most RSUs and PRSUs under the plan were granted with a vesting period of four years, 25% becoming exercisable on or about each anniversary of the grant date. Share-based compensation expense for awards of equity instruments is determined based on the fair value of the awards as of the grant date. Fair value is calculated using the Black-Scholes option pricing model.

Under the terms of our 2014 Equity Incentive Plan, from its adoption until December 31, 2023, we have granted to members of our senior management and certain other employees 30,000 stock awards, options to purchase 2,248,122 common shares and 2,584,777 RSUs and PRSUs, net of any cancelled and/or forfeited awards.  

During the twelve months ended December 31, 2023 the Company granted a total of 378,323 awards under the Company's 2014 Equity Incentive Plan. Most of these awards were comprised of 50% RSUs and 50% PRSUs. RSUs and PRSUs have generally been granted with a vesting period of four years, 25% becoming vested on or about each anniversary of the grant date.

In addition, on June 29, 2023, the Company approved to amend the special condition awards granted in August 2022, to the effect of reducing the threshold minimum average closing price for vesting from $420 to $350 per share through (but excluding) June 29, 2026, and increasing it by $35 per share per year until August 11, 2030 and June 29, 2031 for US and non-US residents, respectively. The awards were granted 50% in the form of PRSUs and 50% in the form of RSUs. These awards will vest in two equal tranches, the first occurring immediately after the date in which the vesting condition is satisfied and the second occurring on the first anniversary of such vesting event. Until December 31, 2023, the Company granted 592,521 of these awards, net of any cancelled and/or forfeited awards.

There were 1,565,733, 1,636,554 and 1,223,449 stock options, RSUs and/or PRSUs outstanding as of December 31, 2023, 2022 and 2021, respectively. For 2023, 2022 and 2021, we recorded $72.5 million, $57.1 million and $42.4 million of share-based compensation expense related to these share option and restricted stock unit agreements, respectively. For further discussion of the 2014 Equity Incentive Plan, see “Compensation—2014 Equity Incentive Plan".

In addition, on December 1, 2021, our compensation committee, as administrator, approved the granting of awards in the form of stock-equivalent units ("SEUs") and performance-based stock-equivalent units ("PSEUs") to be settled in cash or common shares, or a combination thereof, under the 2014 Equity Incentive Plan. The purpose of the granting awards in the form of stock-equivalent units is to provide an incentive to attract, retain and reward talent in the IT industry and to prompt such persons to contribute to the growth and profitability of the Company. Eligible employees receive a grant of stock-equivalent units with a unit value equal to the market value of one common share of the Company, to be settled in cash or common shares of the Company.

Under the terms of our 2014 Equity Incentive Plan, until December 31, 2023 we have granted to eligible employees 37,983 SEUs and PSEUs, net of any cancelled and/or forfeited awards. All stock-equivalent units were granted 50% in the form of PSEUs and 50% in the form of SEUs, each with a vesting period of four years, 25% becoming exercisable on or about each anniversary of the grant date.

There were 28,059 and 57,779 SEUs and PSEUs outstanding as of December 31, 2023 and 2022, respectively. For 2023 and 2022, we recorded $2.3 million and $4.5 million of share-based compensation expense related to these stock-equivalent units and we delivered 4,524 and 0 common shares, respectively. For further discussion of the 2014 Equity Incentive Plan, see “Compensation—2014 Equity Incentive Plan".

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On March 1, 2021, our board of directors adopted an Employee Stock Purchase Plan (the "ESPP"). The purpose of the ESPP is to advance the interests of the Company and our shareholders by providing an incentive to attract, retain and reward our eligible employees and by motivating such persons to contribute to the growth and profitability of the Company. The ESPP provides such eligible employees with an opportunity to acquire a proprietary interest in the Company through the purchase of the Company’s common shares payable by means of payroll deductions. As of December 31, 2023, we have delivered 94,745 common shares under the plan. For further discussion of the ESPP, see “Employees—2021 Employee Stock Purchase Plan".

C. Research and Development, Patents and Licenses, etc.
 
D. Trend Information
 

Other than as disclosed in this report, we are not aware of any trends, uncertainties, demands, commitments, or events since December 31, 2023 that are reasonably likely to have a material adverse effect on our revenues, income, profitability, liquidity, or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

E. Critical Accounting Estimates

See note 4 to our audited consolidated financial statements for the year ended December 31, 2023.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
 
A. Directors and Senior Management
Directors
 
The table below sets forth information concerning our directors as of the date of this annual report. 
NamePositionAgeDate of
Appointment
Current Term
Expiring
at Annual Meeting of
Shareholders to Be
Held in Year
Martín MigoyaChairman of the Board and Chief Executive Officer56April 2, 20212024
Martín Gonzalo Umaran
Director - Chief Corporate Development Officer & President for EMEA
55April 19, 20232026
Guibert Andrés Englebienne
Director - President of Globant X and Globant Ventures - President for Latin America
57April 19, 20232026
Francisco Álvarez-DemaldeDirector45April 22, 20222025
Andrea Mayumi Petroni MerhyDirector48April 22, 20222025
Philip A. OdeenDirector88April 2, 20212024
Linda RottenbergDirector - Lead Independent Director55April 19, 20232026
Maria PinelliDirector61April 22, 20222025
 
Directors may be re-elected for one or more terms of up to four-years. Directors appointed to fill vacancies remain in office until the next general meeting of shareholders.

Globant S.A. was incorporated in Luxembourg on December 10, 2012. References to the terms of service or appointment of our directors and senior management in the following biographies include their service to our predecessor companies, which were organized in Spain.

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Mr. Richard Haythornthwaite resigned as a director of the Company effective as of September 30, 2023. As of the date of this annual report, our board of directors is evaluating several candidates to fill this vacancy.
 
Martín Migoya

Mr. Migoya has served as Chairman of our board of directors and Chief Executive Officer since 2005. He founded our company together with Messrs. Englebienne, Nocetti and Umaran in 2003. His mission is to reinvent the professional services industry through agility and disruptive innovation at all levels of the organization. He is a member of the Young Presidents’ Organization and a board member of Endeavor Argentina. Mr. Migoya holds a degree in electronic engineering from Universidad Nacional de La Plata (UNLP) and a master’s degree in business administration, from the University of CEMA. He co-authored two books, "The Never Ending Digital Journey" and "Embracing the power of AI", where he shares his thoughts on how technology is changing the world and how brands need to adapt to lead this revolution. Since July 2021, Mr. Migoya has served as Manager of Enigma.art LLC. Mr. Migoya has been a featured guest lecturer at various universities including MIT and Harvard, and has been a judge at the Endeavor Entrepreneurs panel and at La Red Innova. He was selected as an Endeavor Entrepreneur in 2005 and won a Konex Award as one of the most innovative entrepreneurs of 2008. He was selected as an Argentine Creative Individual of 2009 and received the Security Award as one of the most distinguished Argentine businessmen of 2009. He also received in 2009 the America Economía Magazine’s “Excellence Award”, which is given to entrepreneurs and executives that contribute to the growth of Latin American businesses. In 2011, Latin Trade recognized Mr. Migoya as Emerging CEO of the Year. In 2013, Mr. Migoya received the “Entrepreneur of the Year Award” from Ernst & Young. In 2019, he was named Top CEO of the Year at the 2019 CEO World Awards and CEO of the year by El Cronista Comercial (Argentina). We believe that Mr. Migoya is qualified to serve on our board of directors due to his deep familiarity with our company and the perspective, experience, and operational expertise in the technology services industry that he has developed during his career and as our co-founder and Chief Executive Officer.
 
Martín Gonzalo Umaran
 
Mr. Umaran has served as a member of our board of directors since 2012 and served as Chief of Staff from 2013 to 2020. As Globant’s Chief of Staff, Mr. Umaran was responsible for coordinating our back-office activities, supporting executives in daily projects and acting as a liaison to our senior management. Since 2008, he has been responsible for our mergers and acquisitions processes and strategic initiatives. From 2005 to 2012, Mr. Umaran served as Globant’s Chief Operations Officer and Chief Corporate Business Officer, in charge of managing our delivery teams and projects. In 2022, Mr. Umaran was appointed as Chief Corporate Development Officer, responsible to incorporate other organizations into the Company as part of its global growth strategy. He has also been named President for EMEA, working side by side with our team in the region to achieve Globant’s growth plans. Together with his three Globant co-founders, Mr. Umaran was selected as an Endeavor Entrepreneur in 2005. Mr. Umaran holds a degree in mechanical engineering from Universidad Nacional de La Plata (UNLP) and a Masters in Business Administration from IDEA. We believe that Mr. Umaran is qualified to serve on our board of directors due to his intimate familiarity with our company and his perspective, experience, and operational expertise in the technology services industry that he has developed during his career as a co-founder of our company.
 
Guibert Englebienne
 
Mr. Englebienne has served as a member of our board of directors since 2003 In 2021, Mr. Englebienne became President of Globant X and Globant Ventures to help drive the success of these initiatives. He also was appointed President for Latin America, a role to provide strategic advice to our regional leadership. Mr. Englebienne previously served as our Chief Technology Officer from 2003 to 2021. He is one of Globant’s co-founders. Prior to co-founding Globant, Mr. Englebienne worked as a scientific researcher at IBM and, later, as head of technology for CallNow.com Inc. As Globant’s Chief Technology Officer, he oversees the technological development of Globant's diverse Studios, each a deep pocket of expertise with a focus on incorporating the latest trends to bring solutions to global companies. Together with his three Globant co-founders, Mr. Englebienne was selected as an Endeavor Entrepreneur in 2005. In addition to his responsibilities at Globant, Mr. Englebienne is President of Endeavor Argentina. In 2011, he was included in Globalization Today’s “Powerful 25” list. Mr. Englebienne holds a bachelor’s degree in Computer Science and Software Engineering from the Universidad Nacional del Centro de la Provincia de Buenos Aires in Argentina. We believe that Mr. Englebienne is qualified to serve on our board of directors due to his intimate familiarity with our company and his perspective, experience, and operational expertise in the technology services industry that he has developed during his career as our co-founder and executive officer.






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Francisco Álvarez-Demalde
 
Mr. Alvarez-Demalde has been a member of our board of directors since 2007. Mr. Álvarez-Demalde served as a member of Globant’s Corporate Governance and Nominating Committee since April 21, 2020, and as a chair of such committee since September 30, 2023. He is a co-founder and managing partner of Riverwood Capital, a leading growth-capital private equity firm focused on the global technology industry, and one of the largest early investors in Globant. Mr. Alvarez-Demalde has built the Riverwood franchise into a leading global technology investment firm, as an active partner to founders and management teams helping scale companies from the $10s of millions to the $100s of millions in revenues. During the past decade, Riverwood has been an active investor in more than 75 technology companies, which have grown their revenues at over 40% per year on average during Riverwood’s hold period. Prior to establishing Riverwood, Mr. Alvarez-Demalde was an investment executive at Kohlberg Kravis Roberts & Co. (KKR), where he focused on leveraged buyouts in the technology industry and other sectors. He also previously held roles with Eton Park Capital Management and Goldman Sachs & Co. Mr. Alvarez-Demalde has invested and been actively involved in the development, operations, and growth of several successful businesses across North America, Latin America and other geographies. Mr. Alvarez-Demalde earned a Licentiate (Honors) in Economics from Universidad de San Andres, Argentina (including an exchange program at the Wharton School). He has led investments in or is a current or former Director or Advisor of several technology companies, including 99, Alog Data Centers do Brasil, Billtrust (Nasdaq: BTRS), Cloudblue, Dock, Globant (NYSE: GLOB), GOintegro, Greenhouse, Industrious, Insider, LAVCA, Mandic, MotionPoint, Navent, Nubox, Pixeon, RD Station, SecurityScorecard, Shiphero, Technisys, VTEX (NYSE: VTEX), among others. Mr. Alvarez-Demalde is also a Global Ambassador with Endeavor and interested in non-profit initiatives related to education. We believe that Mr. Álvarez-Demalde is qualified to serve on our board of directors due to his considerable business experience in the technology industry and his experience serving as a director of other companies.

Andrea Mayumi Petroni Merhy

Ms. Petroni Merhy has served as a member of our board of directors and as member of our corporate governance and nominating committee since April 2022. She is a Managing Director, Head of Business Advisory & Execution and member of the Management Committee for the Investment and Corporate Banking in Asia Pacific at JPMorgan Chase. Prior to that, Ms. Petroni Merhy held a number of leadership roles within JPMorgan Chase including Head of Finance & Business Management for the Investment and Corporate Banking and Wholesale Payments in Asia Pacific, Senior Business Manager for China, Head of Human Resources for Latin America and Head of Finance & Strategy for the Investment Banking in Latin America. From 2015 to 2021, Ms. Petroni Merhy also served as a Board Member of the JPMorgan Chase Bank (China) Company Limited, joining the Nominating and Related Party Transactions committees. Earlier in her career, Ms. Petroni Merhy was an investment banker advising clients on mergers & acquisitions, capital raising and strategic alternatives across all industries in Latin America. Ms. Petroni Merhy holds a bachelor’s degree in Business Administration from Escola de Administração de Empresas Fundação Getúlio Vargas in Brazil. We believe that Ms. Petroni Merhy is qualified to serve on our board of directors due to her extensive business experience, risk management expertise and financial understanding.
 
Philip Odeen
 
Mr. Odeen has served as a member of our board of directors since 2012. He has been the Chairman of Globant's Compensation Committee since 2020 and a member and chair of Globant's Audit Committee since 2014 and 2021, respectively. Mr. Odeen has also served as a proxy director of Leonardo DRS since 2013. He was a director of Booz Allen Hamilton from 2008 to 2019. From 2009 to 2013, Mr. Odeen served as the chairman of the board of directors and lead independent director of AES Corporation, and as a director of AES Corporation from 2003 to 2013. From 2008 to 2013, Mr. Odeen served as the chairman of the board of directors of Convergys Corporation, and as a director of Convergys Corporation from 2000 to 2013. Mr. Odeen served as a director of each of QinetiQ North America, Inc. from 2006 to 2015, ASC Signal Corporation from 2009-2015, and Red Hawk from 2015-2018. From 2006 to 2007, Mr. Odeen served as chairman of the board of directors of Avaya Corporation and as a director from 2002 to 2007. He served on the board of directors of Reynolds and Reynolds Company from 2000 to 2007, and as its chairman from 2006 to 2007. Mr. Odeen was a director of Northrop Grumman from 2002 to 2008. Mr. Odeen served as chairman and Chief Executive Officer of TRW Inc., retiring from the position in December 2001. Additionally, Mr. Odeen served as Chief Executive Officer of BDM from 1992 to 1997. Prior to that he was a partner with Coopers & Lybrand from 1978 to 1992, and Vice Chairman of the Management Consulting practice from 1991 to 1992. Mr. Odeen has a Bachelor’s Degree in Government from University of South Dakota, attended University of Liverpool, England as a Fulbright Scholar, and has a Master’s Degree in Political Science from the University of Wisconsin. We believe that Mr. Odeen is qualified to serve on our board of directors due to his experience in leadership and guidance of public and private companies as a result of his varied global business, governmental and non-profit experience.



 
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Linda Rottenberg

Ms. Rottenberg has served as a member of our board of directors since 2017 and served as a member and chairman of Globant's Corporate Governance and Nominating Committee from 2020 to September 2023. Since October 3, 2023 and September 30, 2023, respectively, Ms. Rottenberg has served as Lead Independent Director and a member of Globant's Audit Committee. Ms. Rottenberg previously served as a member of the Audit Committee from May 9, 2017 through August 2021. Named “Innovator for the 21st Century” (TIME) and one of “America’s Best Leaders” (U.S. News), Ms. Rottenberg is cofounder and CEO of Endeavor, the leading global community of, by, and for high-impact entrepreneurs. Operating in more than 40 markets spanning the globe, Endeavor identifies, scales up, and co-invests in the most innovative, rapidly growing businesses in emerging and underserved markets. Ms. Rottenberg also serves as President of Endeavor Catalyst, the rules-based investment arm of Endeavor with $500M in assets under management across four funds. Launched in 2012, Endeavor Catalyst has invested in 300+ companies under Ms. Rottenberg's leadership. The portfolio comprises 24 exited investments and 50 “unicorn” companies valued at over $1B+. Ms. Rottenberg currently serves as a director in OLO (NYSE: OLO), a top SaaS-based food ordering platform. She also serves on the board of Pershing Square SPARC Holdings. She formerly served as a director of ZAYO, a global bandwidth infrastructure company. She is also a member of YPO, World Economic Forum, Anchor Fund Advisory Board, Yale Ventures Advisory Board, and Vice Chair of Yale President’s Council on International Activities. Author of the New York Times bestselling book, CRAZY IS A COMPLIMENT, and accomplished public speaker, Ms. Rottenberg has been the subject of six Harvard Business School case studies and one Stanford GSB case study. Other honors include the Silicon Valley Forum Visionary Award; Heinz Award for Technology, the Economy, and Employment; Babson College Honorary Doctorate; and the Yale Law School Award of Merit. A graduate of Harvard College and Yale Law School. We believe that Ms. Rottenberg is qualified to serve on our board of directors due to her knowledge and experience in the technology industry and experience serving as a director of other companies.

Maria Pinelli

Ms. Pinelli has served as a member of our board of directors since April 2021 and our audit committee since August 2021. She is a global C-suite executive and CEO of Strategic Growth Advisors, LLC. She currently serves as a member of the Board of Directors, Chair of the Audit Committee for International Game Technology, PLC., and as a member of the Board of Directors, Chair of the Audit Committee, and member of the Compensation Committee for Archer Aviation, Inc. From 2020 to 2022, Ms. Pinelli served as a board director and Chair of the Audit Committee for Clarim Acquisition Corporation. She is a former EY partner whose career there spanned over 34 years. Previously, Ms. Pinelli served as Global Vice Chair of Ernst & Young LLP (“EY”) from 2011 to 2017 and led EY’s Global Strategic Growth Business unit with a focus on serving private and public companies poised for exponential growth and supported entrepreneurs. Ms. Pinelli led EY’s efforts across all business sectors overseeing the Americas, Europe, Middle East, India, Africa, Asia Pacific and Japan, regions covering over 150 countries. During the same period, she also served as EY’s Global IPO Leader, helping clients prepare for the public markets including IPO readiness, SOX compliance and how to manage stakeholder expectations. Prior to leading the global business of EY, Ms. Pinelli was EY’s Director of Strategic Growth Markets for the Americas from 2006 to 2011. In this role, Ms. Pinelli led a team of over 5,000 professionals serving high growth private, pre-IPO companies, and public and private equity backed businesses. Following her role as Global Vice Chair, from 2018 to 2020, Ms. Pinelli led EY’s Consumer Products and Retail sector Ms. Pinelli is a qualified public accountant in Canada and the United Kingdom, and was a lead client service partner serving significant clients in the technology, consumer and retail sectors. She successfully led more than 20 initial public offerings in four different countries and more than 25 merger and acquisition transactions worldwide and testified before the U.S. House Financial Services Committee on the state of the capital markets. Her experience includes strategic transactions and due diligence advice, Sarbanes-Oxley implementation and stakeholder management Ms. Pinelli received her Bachelor of Commerce from McMaster University and completed executive programs at Harvard Business School and the Kellogg School of Management. Ms. Pinelli has also participated as a speaker at the Most Powerful Women Summit, World Economic Form and G20 summits, and has been featured in the Wall Street Journal, Bloomberg, CNBC and Squawk Box. In addition, she was admitted to the G50, Committee 200 and recognized as one of the Square Mile’s most inspiring Power 100 Women . Ms. Pinelli has also served as Chair of the Network for Teaching Entrepreneurship and a member of the World Economic Forum Global Growth Company Advisory Committee. We believe that Ms. Pinelli is well-qualified to serve as a director and financial expert due to her previous leadership roles, international business experience, financial acumen and extensive experience in advising growth companies.

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 Senior Management
 
As of the date of this annual report, our group senior management is made up of the following members:
 
NamePosition
Martín MigoyaChief Executive Officer
Martín UmaranChief Corporate Development Officer – President for EMEA
Guibert EnglebiennePresident of Globant X and Globant Ventures – President for Latin America
Juan Ignacio UrthiagueChief Financial Officer
Patricia PomiesChief Operating Officer
Yanina ContiChief Accounting Officer
Wanda WeigertChief Brand Officer
Diego TártaraChief Technology Officer
Patricio Pablo RojoGeneral Counsel
 
The following is the biographical information of the members of our group senior management other than Mrs. Migoya, Umaran and Englebienne, whose biographical information is set forth in “— Directors.”

Juan Urthiague
 
Mr. Urthiague has been our Chief Financial Officer since October 2018 and is in charge of corporate finance, treasury, accounting and tax, financial reporting, financial services and investor relations. Mr. Urthiague joined Globant in 2011, and was a key member in the company’s global expansion and transformation into a publicly listed company on the NYSE. Prior to his return to Globant, he spent 15 months outside the company serving as Chief Financial Officer Latam for OLX and as Chief Financial Officer for avantrip.com. Prior to joining Globant in 2011, Mr. Urthiague worked as Planning Manager for Amadeus IT Group in Spain and as Senior Credit Specialist in Merrill Lynch in Ireland and also held financial roles for companies like British American Tobacco, Ternium and IBM. Mr. Urthiague has a MSc. in Finance and Capital Markets from Dublin City University and Bachelor’s degree in Business Administration from the Universidad de Buenos Aires.
 
Patricia Pomies

Mrs. Pomies has been our Chief Operating Officer since April 2021. In this role, she works on turning strategy into actionable goals for growth, helping to implement organization-wide goal setting, performance management, and annual operating planning. This role consolidates a comprehensive vision in which Delivery, People, Performance and Operations come together to ensure sustainable business growth. From January 2017 to April 2021, Mrs. Pomies served as our Chief Delivery Officer where she was in charge of our overall strategy related to quality of service and delivery. At the same time, recognizing the importance of Globers’ well-being, training and skill development, Mrs. Pomies was appointed as Chief Delivery and People Officer, expanding her responsibilities to include oversight of the People department of the company. Mrs. Pomies is an advocate for increasing the number of women in management positions, recognizing the gender gap in the tech industry. In addition, she was one of the architects behind Globant’s Be Kind initiative, focusing on development areas in gender equality, technology ethics and renewable energy, among others. Mrs. Pomies first joined our company in 2012 and was previously a director of Europe, Middle East and Africa (EMEA) and on-line, insurance and travel (OIT), two of our main business units. As such, she was responsible for each unit’s business and operations, with particular focus on expanding the EU market. Mrs. Pomies was director at Educ.ar Portal from 2003 to 2013, a key initiative within Argentina’s Ministry of Education for principals, teachers, students and families to adopt information and communication technologies in education. Additionally, she was responsible for content production and tracking of “Equality Connect,” a program directly supported by the Argentinian Government to distribute more than 3.5 million netbooks within the Argentine public education system. Mrs. Pomies has been a Professor of Social Communication at Maimonides University and Assistant Professor of Communication Sciences at the University of Buenos Aires.







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Yanina Conti
 
Mrs. Conti has been our Chief Accounting Officer since 2017. From 2013 until 2017, she served as our SEC Reporting and Audit Manager. From 2004 to 2013, Mrs. Conti worked for Ernst & Young, auditing large public and private firms and gaining experience with IFRS accounting and audit procedures. As our Chief Accounting Officer, Mrs. Conti is in charge of accounting, payroll, external audit and reporting. Mrs. Conti has a degree in business administration from the Universidad de Buenos Aires and is a chartered accountant.
 
Wanda Weigert
 
Mrs. Weigert has been our Chief Brand Officer since November 2018. From 2007 to 2018, she served as our Communications Manager and Director of Communications and Marketing. She joined Globant in 2005 and worked for two years in the Internet marketing department as a senior consultant. From 2002 to 2005, she worked at Jota Group, a publishing house where she was responsible for the development of corporate communications tools for different multinational customers. Mrs. Weigert created and supervises Globant’s communications department. As our Chief Brand Officer, she coordinates Globant’s relationships with the press throughout the globe. She is also responsible for developing both our internal and external communications strategies. Mrs. Weigert holds a bachelor’s degree in social communications from Universidad Austral and she completed her post-graduate studies in marketing at the Pontificia Universidad Católica Argentina “Santa Maria de los Buenos Aires."

Diego Tártara

Diego Tártara is our Chief Technology Officer and is in charge of overseeing our Studios and all technology offerings, including Business Hacking, and Adaptive Organizations. He has been with the Company since 2008, when he joined as a leader for a Company development group. Since then, he has held several management positions, including Technical Director, Studio Partner and CTO for Globant Studios. Shortly after joining Globant, he became the Technical Director for one of Globant’s major accounts, a leading gaming company. He was then appointed as Studio Partner for Gaming, a position he held for over five years. He also managed the IoT studio for a year and was part of the team that started the Discover studio before being appointed as CTO where he contributes to developing Globant's value proposition and ensures that the Company remains at the forefront of innovation. Diego has more than 20 years of experience developing small, mid and large scale software, and has a strong background in desktop, embedded and backend development and a passion for C/C++, gaming and graphics.

Patricio Pablo Rojo
 
Mr. Rojo has been our General Counsel since October 2021. He has the overall responsibility of supervising Globant´s Legal and Compliance department. He previously served in this role from 2013 to 2018. Prior to his return to Globant, he spent almost three years as our external counsel, assisting Globant with several transactions and critical initiatives. Prior to joining Globant in 2013, Mr. Rojo worked as a corporate and banking law associate at the law firm Marval O´Farrel & Mairal from 2002 to 2006 and from 2007 to 2013. Between 2006 and 2007, he was an International Associate at the New York office of Simpson, Thacher & Bartlett LLP. Pablo has a law degree from the Pontificia Universidad Católica Argentina "Santa María de los Buenos Aires" and has completed post-graduate studies in law and economics at Torcuato Di-Tella University.
 

B. Compensation
 
Compensation of Board of Directors and Senior Management
 
The total fixed and variable remuneration of our executive directors and senior management for the years ended December 31, 2023, 2022 and 2021 amounted to $7.0 million, $6.8 million and $6.7 million, respectively.
 
We adopted an equity incentive plan in connection with the completion of our initial public offering. See “Compensation — 2014 Equity Incentive Plan” below for further information. From the adoption of that plan until December 31, 2023 we granted to members of our senior management and certain other employees 30,000 stock awards, options to purchase 2,248,122 common shares, 2,584,777 RSUs and PRSUs, and 37,983 SEUs and PSEUs, net of any cancelled and/or forfeited awards. See "Liquidity and Capital Resources — Equity Compensation Arrangements" above for further information. In addition, we replaced our existing variable compensation arrangements with a new short-term incentive plan providing for the payment of bonuses based on the achievement of certain financial and operating performance measures.

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On November 15, 2023 our board of directors adopted a Policy for Recovery of Erroneously Awarded Incentive-Based Compensation (the "Clawback Policy"), effective as of October 2, 2023. The Clawback Policy is administered by our compensation committee and was adopted in compliance with Section 10D of the Exchange Act and applicable rules of the NYSE. The Clawback Policy provides that if we are required to prepare an accounting restatement, then we will seek to recover incentive-based compensation from certain current or former executive officers' that was erroneously awarded and received during the three completed fiscal years immediately preceding the date we are required to prepare such accounting restatement. A copy of this policy is included as Exhibit 97.1 to this Annual Report.
 
2014 Equity Incentive Plan
 
On July 3, 2014, our board of directors and shareholders approved and adopted our 2014 Equity Incentive Plan, which was amended on May 9, 2016, February 13, 2019, May 18, 2021 and June 8, 2022. Pursuant to the June 8, 2022 amendment adopted by our board of directors, we may issue stock awards up to an aggregate amount of 5,666,667 common shares under the 2014 Equity Incentive Plan. As of December 31, 2023, the number of common shares available for issuance pursuant to existing un-exercised and/or unvested and future stock awards was 2,365,114. The following description of the plan is qualified in its entirety by the full text of the plan, which has been filed with the SEC as an exhibit to the registration statement previously filed in connection with our initial public offering and incorporated by reference herein.
 
Purpose. We believe that the plan will promote our long-term growth and profitability by (i) providing key people with incentives to improve shareholder value and to contribute to our growth and financial success through their future services, and (ii) enabling us to attract, retain and reward the best-available personnel.
 
Eligibility; Types of Awards. Selected employees, officers, directors and other individuals providing bona fide services to us or any of our affiliates, are eligible for awards under the plan. The administrator of the plan may also grant awards to individuals in connection with hiring, recruiting or otherwise before the date the individual first performs services; however, those awards will not become vested or exercisable before the date the individual first performs services. The plan provides for grants of stock options, stock appreciation rights, restricted or unrestricted stock awards, RSUs, performance awards and other stock-based awards, or any combination of the foregoing.

Common Shares Subject to the Plan. The number of common shares that we may issue with respect to awards granted under the plan will not exceed an aggregate of 5,666,667 common shares. This limit will be adjusted to reflect any stock dividends, split ups, recapitalizations, mergers, consolidations, share exchanges, and similar transactions. If any award, or portion of an award, under the plan expires or terminates unexercised, becomes unexercisable, is settled in cash without delivery of common shares, or is forfeited or otherwise terminated or cancelled as to any common shares, the common shares subject to such award will thereafter be available for further awards under the plan. Common shares used to pay the exercise price of an award or tax obligations will not be available again for other awards under the plan.

Administration. The plan is administered by our compensation committee. The administrator has the full authority and discretion to administer the plan and to take any action that is necessary or advisable in connection with the administration of the plan, including without limitation the authority and discretion to interpret and construe any provision of the plan or any agreement or other documents relating to the plan. The administrator’s determinations will be final and conclusive.
 
Awards. The plan provides for grants of stock options, stock appreciation rights, restricted or unrestricted stock awards, RSUs, performance awards, and other stock-based awards.
 
Stock Options. The plan allows the administrator to grant incentive stock options, as that term is defined in section 422 of the Internal Revenue Code, or non-statutory stock options. Only our employees or employees of our subsidiaries may receive incentive stock option awards. Options must have an exercise price that is at least equal to the fair market value of the underlying common shares on the date of grant and not lower than the par value of the underlying common shares. The option holder may pay the exercise price in cash or by check, by tendering common shares, by a combination of cash and common shares, or by any other means that the administrator approves. The options have a maximum term of ten years; however, the options will expire earlier if the optionee’s service relationship with the company terminates.
 
Stock Appreciation Rights. The plan allows the administrator to grant awards of stock appreciation rights which entitle the holder to receive a payment in cash, in common shares, or in a combination of both, having an aggregate value equal to the product of the excess of the fair market value on the exercise date of the underlying common shares over the base price of the common shares specified in the grant agreement, multiplied by the number of common shares specified in the award being exercised.  

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Stock Awards. The plan allows the administrator to grant awards denominated in common shares or other securities, stock equivalent units or RSUs, securities or debentures convertible into common shares or any combination of the foregoing, to eligible participants. Awards denominated in stock equivalent units will be credited to a bookkeeping reserve account solely for accounting purposes. The awards may be paid in cash, in common shares or in a combination of common shares or other securities and cash.
 
Performance Awards. The plan allows the administrator to grant performance awards including those intended to constitute “qualified performance-based compensation” within the meaning of Section 162(m) of the U.S. Internal Revenue Code. The administrator may establish performance goals relating to any of the following, as it may apply to an individual, one or more business units, divisions or subsidiaries, or on a company-wide basis, and in either absolute terms or relative to the performance of one or more comparable companies or an index covering multiple companies: revenue; earnings before interest, taxes, depreciation and amortization (EBITDA); operating income; pre- or after-tax income; cash flow; cash flow per share; net earnings; earnings per share; price-to-earnings ratio; return on equity; return on invested capital; return on assets; growth in assets; share price performance; economic value added; total shareholder return; improvement in or attainment of expense levels; improvement in or attainment of working capital levels; relative performance to a group of companies comparable to the company, and strategic business criteria consisting of one or more objectives based on the company’s meeting specified goals relating to revenue, market penetration, business expansion, costs or acquisitions or divestitures. Performance targets may include minimum, maximum, intermediate and target levels of performance, with the size of the performance-based stock award or the lapse of restrictions with respect thereto based on the level attained.
 
A performance target may be stated as an absolute value or as a value determined relative to prior performance, one or more indexes, budget, one or more peer group companies, any other standard selected by the administrator, or any combination thereof. The administrator shall be authorized to make adjustments in the method of calculating attainment of performance measures and performance targets in recognition of: (A) extraordinary or non-recurring items; (B) changes in tax laws; (C) changes in accounting policies; (D) charges related to restructured or discontinued operations; (E) restatement of prior period financial results; and (F) any other unusual, non-recurring gain or loss that is separately identified and quantified in our financial statements. Notwithstanding the foregoing, the administrator may, in its sole discretion, modify the performance results upon which awards are based under the plan to offset any unintended results arising from events not anticipated when the performance measures and performance targets were established.
 
Change in Control. In the event of any transaction resulting in a “change in control” of Globant S.A. (as defined in the plan), outstanding stock options and other awards that are payable in or convertible into our common shares will terminate upon the effective time of the change in control unless provision is made in connection with the transaction for the continuation, assumption, or substitution of the awards by the surviving or successor entity or its parent. In the event of such termination, the holders of stock options and other awards under the plan will be permitted immediately before the change in control to exercise or convert all portions of such stock options or awards that are exercisable or convertible or which become exercisable or convertible upon or prior to the effective time of the change in control.

Notwithstanding the foregoing, in the event of a change in control, all awards, subject to certain exclusions, granted to certain senior executives will (a) become vested and payable in equal parts on each of the change in control completion date, and the 6th and 12th month anniversaries from such date, unless full payment is resolved by the administrator upon consummation of the change in control; (b) be paid and settled in cash immediately, if the senior executive is terminated without cause or resigns with good reason during the first year following the change in control completion date; and (c) become vested and settled in cash on the change in control completion date, if the executive is terminated without cause or resigned with good reason at any time from the date the Company was made aware of the potential change in control, and such change in control occurs within the 6 months following the executive's dismissal or resignation.
 
Amendment and Termination. No award will be granted under the plan after the close of business on the day before the tenth anniversary of the effective date of the plan (i.e., July 2, 2024). Our board of directors may amend or terminate the plan at any time. Shareholder approval is required to reprice underwater options.
 
Director Compensation

Only those directors who are considered to be independent directors under the corporate governance rules of the NYSE are eligible, subject to our shareholders’ approval, to receive compensation from us for their service on our board of directors. In this respect, independent members of our board of directors are eligible to receive cash and/or share based compensation for their services as directors, as well as reimbursement of reasonable and documented costs and expenses incurred by them in connection with attending any meetings of our board of directors or any committees thereof.
 
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During 2023, we paid an aggregate cash compensation of $575,000 and we granted a total of 3,191 RSUs to the independent members of our board of directors, as further described below. Except as described below, all such compensation had been previously approved by our shareholders at our 2023 annual general meeting:


Name
Cash Compensation
RSUs
RSUs value as of grant date
Total Compensation
Francisco Álvarez-Demalde
$100,000 
518
$99,921 $199,921 
Andrea Mayumi Petroni Merhy
100,000 
518
99,921 199,921 
Philip A. Odeen
100,000 
518
99,921 199,921 
Linda Rottenberg
100,000 
*711
137,423 237,423 
Maria Pinelli
100,000 
518
99,921 199,921 
Richard Haythornthwaite**
75,000 
408
75,006 150,006 
Totals
$575,000 3,191 $612,115 $1,187,113 
_______________
* As additional compensation for her role as Lead Independent Director during 2023, Mrs. Rottenberg was granted additional 193 RSUs (valued at $37,501 as of the grant date), which are conditioned upon approval by shareholders at our annual general meeting.
** Mr. Richard Haythornthwaite resigned as a director of the Company effective as of September 30, 2023.

Members of our senior management who are members of our board of directors (Messrs. Migoya, Umaran and Englebienne) will not receive compensation from us for their service on our board of directors, but have received and will continue receiving cash compensation and share based compensation for their services as executive officers. See “Compensation — Compensation of Board of Directors and Senior Management.”

Benefits upon Termination of Employment
 
Neither we nor our subsidiaries maintain any directors’ service contracts providing for benefits upon termination of service.

In 2022, we entered into amended and restated non-competition agreements with our founders and certain of our senior executives to, among other things, include the cash equivalent to their non-cash compensation (subject to certain exclusions) in the calculation of their respective compensation. Pursuant to these agreements, these employees have agreed to non-competition and non-interference obligations until the second anniversary of the termination of their employment, and a non-disparagement obligation. In consideration of these covenants, Mr. Martín Migoya will receive a compensation equal to his cash and non-cash compensation for 36 months following the date of termination of his employment, and the other founders and certain senior executives will receive a compensation equal to his or her cash and non-cash compensation for 24 months following the date of termination of his or her employment. Cash compensation will be calculated based on the highest monthly salary during the 12-month period immediately preceding the date of termination of employment and the annual cash bonus payable at the latest target amount. Non-cash compensation will be calculated based on the total equity compensation received by the employee during the 12-month period immediately preceding the date of termination of their employment, subject to certain exclusions. This compensation will be paid in two equal installments, 50% immediately after termination of their employment, and 50% on the first anniversary therefrom. In addition, they will be entitled to receive continued health coverage and life insurance for 24 to 36 months after the termination of employment. These agreements may be terminated by us in case of termination with cause or resignation without good reason.

We also entered into similar non-competition agreements with other senior executives, whereby they agreed to a non-competition and non-interference obligation until the first anniversary of the termination of employment, and a non-disparagement obligation. In consideration of these covenants, these senior executives will receive compensation equal to full cash compensation for 12 months following the date of termination of their employment; provided that such cash compensation will be calculated based on the highest monthly salary during the 12-month period immediately preceding the date of termination of employment and one time the annual cash bonus payable to them at the latest target amount, less applicable taxes and withholdings. This compensation will be paid in four equal installments, on each of the third, sixth, ninth and twelfth month anniversary of the date of termination of their employment. In addition, they will be entitled to receive continued health coverage and life insurance after the termination of their employment for a period of 12 months. These agreements may be terminated by us in case of termination with cause or resignation without good reason.
 

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Pension, Retirement or Similar Benefits
 
We do not pay or set aside any amounts for pension, retirement or other similar benefits for our officers or directors.
 
C. Board Practices
 
Globant S.A. is managed by our board of directors which is vested with the broadest powers to take any actions necessary or useful to fulfill our corporate purpose with the exception of actions reserved by law or our articles of association to the general meeting of shareholders. Our articles of association provide that our board of directors must consist of at least seven members and no more than fifteen members. Our board of directors meets as often as company interests require.
 
A majority of the members of our board of directors present or represented at a board meeting constitutes a quorum, and resolutions are adopted by the simple majority vote of our board members present or represented. In the case of a tie, the chairman of our board shall have the deciding vote. Our board of directors may also make decisions by means of resolutions in writing signed by all directors.

 Directors are elected by the general meeting of shareholders, and appointed for a period of up to four years; provided, however, that directors are elected on a staggered basis, with one-third of the directors being elected each year; and provided, further, that such term may be exceeded by a period up to the annual general meeting held following the fourth anniversary of the appointment, and each director will hold office until his or her successor is elected. The general shareholders meeting may remove one or more directors at any time, without cause and without prior notice by a resolution passed by simple majority vote. If our board of directors has a vacancy, such vacancy may be filled on a temporary basis by a person designated by the remaining members of our board of directors until the next general meeting of shareholders, which will resolve on a permanent appointment. Any director shall be eligible for re-election indefinitely.
 
Within the limits provided for by law and our articles of association, our board of directors may delegate to one or more directors or to any one or more persons, who need not be shareholders, acting alone or jointly, the daily management of Globant S.A. and the authority to represent us in connection with such daily management. Our board of directors may also grant special powers to any person(s) acting alone or jointly with others as agents of Globant S.A.
 
Our board of directors may establish one or more committees, including without limitation, an audit committee, a corporate governance and nominating committee and a compensation committee, and for which it shall, if one or more of such committees are set up, appoint the members, determine the purpose, powers and authorities as well as the procedures and such other rules as may be applicable thereto.
 
No contract or other transaction between us and any other company or firm shall be affected or invalidated by the fact that any one or more of our directors or officers is interested in, or is a director, associate, officer, agent, adviser or employee of such other company or firm. Any director or officer who serves as a director, officer or employee or otherwise of any company or firm with which we shall contract or otherwise engage in business shall not, by reason of such affiliation with such other company or firm only, be prevented from considering and voting or acting upon any matters with respect to such contract or other business.
 
Any director having an interest in a transaction submitted for approval to our board of directors that conflicts with our interest, must inform our board of directors thereof and to cause a record of his statement to be included in the minutes of the meeting. Such director may not take part in these deliberations and may not vote on the relevant transaction. At the next general meeting, before any resolution is put to a vote, a special report shall be made on any transactions in which any of the directors may have had an interest that conflicts with our interest.
 
No shareholding qualification for directors is required.
 
Any director and other officer, past and present, is entitled to indemnification from us to the fullest extent permitted by law against liability and all expenses reasonably incurred or paid by such director in connection with any claim, action, suit or proceeding in which he is involved as a party or otherwise by virtue of his being or having been a director. We may purchase and maintain insurance for any director or other officer against any such liability.
 
No indemnification shall be provided against any liability to our directors or executive officers by reason of willful misconduct, bad faith, gross negligence or reckless disregard of the duties of a director or officer. No indemnification will be provided with respect to any matter as to which the director or officer shall have been finally adjudicated to have acted in bad faith and not in our interest, nor will indemnification be provided in the event of a settlement (unless approved by a court or our board of directors).
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Board Committees
 
Our board of directors has established an audit committee, a compensation committee and a corporate governance and nominating committee, as well as the position of lead independent director. Our board of directors may from time to time establish other committees.
 
Audit Committee
 
Our audit committee oversees our corporate accounting and financial reporting process. Among other matters, our audit committee:
 
is responsible for the appointment, compensation and retention of our independent auditors and reviews and evaluates the auditors’ qualifications, independence and performance;
oversees our auditors’ audit work and reviews and pre-approves all audit and non-audit services that may be performed by them;
reviews and approves the planned scope of our annual audit;
monitors the rotation of partners of the independent auditors on our engagement team as required by law;
reviews our financial statements and discusses with management and our independent auditors the results of the annual audit and the review of our quarterly financial statements;
reviews our critical accounting policies and estimates;
oversees the adequacy of our accounting and financial controls;
annually reviews the audit committee charter and the committee’s performance;
reviews and approves related-party transactions;
reviews our enterprise risk management (including cybersecurity); and
establishes and oversees procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls or auditing matters and oversees enforcement, compliance and remedial measures under our code of conduct.

The current members of our audit committee are Mses. Pinelli and Rottenberg and Mr. Odeen, with Mr. Odeen serving as the chairman and Ms. Pinelli serving as the audit committee financial expert as currently defined under applicable SEC rules. Each of Mses. Pinelli and Rottenberg and Mr. Odeen satisfies the “independence” requirements within the meaning of Section 303A of the corporate governance rules of the NYSE as well us under Rule 10A-3 under the Exchange Act.
 
On May 13, 2014, our board of directors adopted a written charter for our audit committee. On November 15, 2023 our board of directors approved an amendment to the audit committee charter. The audit committee charter, as amended, is available on our website at http://www.globant.com.
 
Compensation Committee
 
Our compensation committee reviews, recommends and approves policy relating to compensation and benefits of our officers and directors, administers our common shares option and benefit plans and reviews general policy relating to compensation and benefits. Duties of our compensation committee include:
 
reviewing and approving corporate goals and objectives relevant to compensation of our directors, chief executive officer and other members of senior management;
evaluating the performance of the chief executive officer and other members of senior management in light of those goals and objectives;
based on this evaluation, determining and approving the compensation of the chief executive officer and other members of senior management;
administering the issuance of common shares options and other awards to members of senior management and directors under our compensation plans; and
reviewing and evaluating, at least annually, the performance of the compensation committee and its members, including compliance of the compensation committee with its charter.

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Mr. Richard Haythornthwaite resigned as a director of the Company and member of the compensation committee effective as of September 30, 2023. Mr. Haythornthwaite vacancy in the compensation committee will be filled as soon as a new director is appointed to fill Mr. Haythornthwaite's vacancy in the board of directors. The current members of our compensation committee are Messrs. Odeen and Alvarez Demalde, with Mr. Odeen serving as chairman. Each of Messrs. Odeen and Alvarez Demalde satisfies the “independence” requirements within the meaning of Section 303A of the corporate governance rules of the NYSE.
 
Effective as of July 23, 2014, our board of directors adopted a written charter for our compensation committee, which is available on our website at http://www.globant.com.

Corporate Governance and Nominating Committee
 
Our corporate governance and nominating committee identifies individuals qualified to become directors; recommends to our board of directors director nominees for each election of directors; develops and recommends to our board of directors criteria for selecting qualified director candidates; considers committee member qualifications, appointment and removal; recommends corporate governance guidelines applicable to us; and provides oversight in the evaluation of our board of directors and each committee.
 
Concurrently with her appointment as lead independent director and member of the audit committee, Ms. Linda Rottenberg resigned as member of the corporate governance and nominating committee. Her vacancy in the corporate governance and nominating committee will be filed as soon as possible after our next annual general meeting. The current members of our corporate governance and nominating committee are Ms. Mayumi Petroni Merhy and Mr. Alvarez-Demalde, with Mr. Alvarez-Demalde serving as chairman. Each of Ms. Mayumi Petroni Merhy and Mr. Alvarez-Demalde satisfies the “independence” requirements within the meaning of Section 303A of the corporate governance rules of the NYSE.
 
Effective as of July 23, 2014, our board of directors adopted a written charter for our corporate governance and nominating committee. In November 2021, our corporate governance and nominating committee approved an amendment to its charter intended to enhance our corporate governance practices, including, among others, a broader view of diversity in our board nominees selection process, an increased emphasis on attracting and/or retaining director nominees with certain specific skills and diverse experience, and the enhancement of our environmental, social and governance performance. Our corporate governance and nominating committee’s charter, as amended, is available on our website at http://www.globant.com.

Lead Independent Director
 
On October 3, 2023, our board of directors established the position of lead independent director and adopted the Lead Independent Director Charter, which governs the lead independent director authority, responsibilities and duties. The charter provides that, in circumstances where the chairman of the board of directors is not independent, the members of the board of directors may resolve to appoint from among the independent directors a lead independent director. The Lead Independent Director Charter is available on our website at http://www.globant.com.

Duties of the lead independent director include, among others:

Consult and agree with the chairman on the frequency and schedule of board of directors and board of directors committees meetings;
Coordinate and preside over all meetings of the board of directors at which the chairman is not present and over all meetings and executive sessions of independent director’s; and
Serve as the principal liaison between the independent directors and the chairman/CEO, and the senior management.

Effective October 3, 2023, the board of directors appointed Ms. Linda Rottenberg to serve as the lead independent director.

D. Employees
 
Our Globers
 
People are one of our most valuable assets. Attracting and retaining the right employees is critical to the success of our business and is a key factor in our ability to meet our client’s needs and the growth of our client and revenue base.
 
As of December 31, 2023, 2022 and 2021, on a consolidated basis, we had 29,150, 27,122 and 23,526 employees, respectively.
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As of December 31, 2023, approximately 4% of our Globers were covered by collective bargaining agreements ("CBAs"). Globers in (i) Argentina, mostly in the Cities of Rosario and Mendoza, were covered under the Federación Argentina de Empleados de Comercio y Servicios CBA; (ii) Brazil were mainly covered under the Sindicato dos Trabalhadores em Processamento de Dados e Tecnología da Informação do Estado de São Paulo CBA; (iii) Spain were mainly covered under the Consultancy Services CBA and the Marketing Agencies CBA; (iv) France, were covered under the Syntec CBA; and (v) Italy, were covered under the Metalurgic CBA.

The following tables show our total number of full-time employees as of December 31, 2023 broken down by functional area and geographical location:
 
 Number of employees
Technology24,968 
Operations2,148 
Management and administration1,696 
Sales338 
Total29,150 
 
 Number of employees
Colombia5,816 
Argentina5,603 
India4,277 
Mexico3,305 
Brazil1,933 
Peru1,344 
Spain1,276 
Chile1,191 
Uruguay1,008 
United States880 
Romania817 
Italy416 
Moldova224 
United Kingdom220 
Ecuador176 
Belarus112 
Vietnam100 
Canada87 
France82 
Costa Rica79 
Denmark70 
Poland35 
Australia29 
Germany20 
Luxembourg
Other countries49 
Total29,150 
 
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In 2007, we started shifting from a Buenos Aires-centric delivery model to a distributed organization with locations across Latin America, Europe, Asia, and elsewhere. We believe that decentralizing our workforce and delivery centers improves our access to talent and could mitigate the impact of IT professionals’ attrition on our business. Additionally, we provide employees with more choices of where to work, which improves satisfaction and helps us retain our Globers. We continue to draw talent primarily from Latin America and Asia’s abundantly skilled talent base.

We believe our relations with our employees are good and we have not experienced any significant labor disputes or work stoppages.
 
Recruitment

We are committed to offering a flexible and empathetic recruiting process which personalizes the experiences of our candidates, with a strong, people-centered approach at the heart of our value proposition. Our main purpose is to help our clients design and scale their teams with the best talent, being able to meet and exceed the increasing demand for digital and IT services.

Through our global presence, with delivery centers in North America, Latin America, Europe, Asia and Oceania, we boost a decentralization strategy that allows us to expand and diversify our sources of talent in our development centers all over the world.

Our offices are located near regional academic and engineering hubs to facilitate our access to a growing talent base. In the case of Latin America, certain of the top universities from the region are located in cities where we have delivery centers with large operations. We work closely with those colleges, as well as non-governmental organizations, tech clusters and professional organizations to nurture the technological ecosystem and create opportunities for growth for both Globant and our current and prospective Globers, through meetups, conferences, bootcamps and recruiting events.

Attraction  

We are constantly looking for talent who are motivated to be part of a leading company that uses the latest technologies in the digital field to reinvent organizations and industries.

Since our inception, we believe we have become a unique player for talent in the countries where we have operations. Our culture is the foundation that supports and facilitates our distinctive approach.

This culture can be best described as entrepreneurial, collaborative, flexible, diverse and inclusive. Diversity and Inclusion are key to our business, as we seek to maintain our position at the forefront of technological innovation and creativity. This is why we strive to find talent in diverse places and walks of life, and why we launched several initiatives to strengthen our diversity.

As a key part of our core mission to stay current in a rapidly evolving technology era, in the past years we have undertaken a significant transformation of our processes. This strategic shift paves the way for the integration of AI into our processes, marking a pivotal change in our approach to decision-making. Our dedication to a data-driven strategy has empowered us to engage in more strategic and predictive analysis in our daily operations, reflecting our commitment to leveraging cutting-edge technologies, while offering a distinctive candidate experience.

Great Place to Work recognized Globant as one of the best places to work in Latin America, with special recognitions for Argentina, Uruguay and Colombia. Also in 2022, Fast Company included Globant in its '100 Best Companies for Innovators' list.

Our commitment to innovation and, quality, and a positive work culture complements our recruitment process that met the demands of the industry. Moving forward, we are prepared to adapt and innovate our processes to overcome challenges and achieve success.

Employee retention is one of our main priorities and a key driver of operational efficiency and productivity. We seek to retain top talent by providing the opportunity to work on cutting-edge projects for world-class clients, a flexible work environment, training and development programs, and non-traditional benefits. The total attrition rate among our Globers was 8.1%, 16.7% and 18.7% for the years ended December 31, 2023, 2022 and 2021, respectively.

Career Value Proposition

In 2020, we reinvented our strategy and career value proposition to provide enhanced guidance and new tools for Globers, empowering them to take ownership of their career progression and fostering growth and evolution to lead themselves, their teams, and the business. The new career value proposition provides personalized career paths and programs designed to unlock potential and enhance skills. Here are some of the key ways Globers can grow at Globant:
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Gain in geo-cultural diversity by collaborating with people from different cultures.
Amplify technology, client, and/or industry expertise through lateral movements, participation in different types of PODs, or engagement in new projects.
Advance in their specific path through vertical growth.
Develop their leadership skills and role.

These programs, tools, and experiences are structured around our Delta Formula: Explore + Educate + Expose = Movement. Within each component, Globers receive guidance from Mentors and Business Leaders, with continuous support from the People Team.

Year by year, we iterate this value proposition, inviting our talent to align with our vision: Globant is made out of its People, and its People are the way to create a better world.

2020 - 2021

We introduced My Growth, a tool that offers a detailed list of capabilities to develop within each technology and practice. Globers and their Mentors can explore, work on, and track their skills using this platform. As of 2023, the tool includes more than 50 Working Ecosystems, with over 15,000 active users.
We established Globant University Campus, offering various learning experiences in different formats. A year later we introduced the Glober-centric and neurodiverse learning experiences, fostering knowledge sharing and offering training programs like Augmented Leadership and Relational Leadership.

2022

We enhanced the Globant University Campus with AI technology for semantic search and recommendations, a social profile for connecting and sharing training, and a new interface design. 98.5% of the Company participated in these learning experiences, with an average increase of over 16% in the time dedicated to learning compared to 2021.
We launched our Open Career Program that empowers Globers to apply for any open position within the Company using an AI-powered marketplace. In 2023, over 6,500 Globers applied to projects, resulting in over 2,000 successful matches.
We initiated a transformation of our Performance Assessments by fostering a collaborative approach among leaders, with the aim of embracing a more comprehensive perspective.

2023

We launched the "Learning Match," an AI-powered feature connecting employees with similar interests to facilitate knowledge exchange.
We also introduced two new certifications focused on Leadership and AI. These learning initiatives reached more than 27,800 Globers, delivering over 4,500 experiences. The time dedicated to learning increased by 75%, with a high satisfaction rate indicated by a Learning NPS of 57.
Additionally, we implemented a new Performance Process that shifts how we assess our employees. This approach, named Performance Retrospective, tailors guidance for improvements based on seniority. It encourages meaningful conversations by focusing on accurate feedback within project and assignment contexts. Currently, over 95% of Globers have at least two performance talks each year.
In the 360 feature in StarMe Up, we included the option to recommend a promotion directly to a teammate's leader.
We also introduced the Readiness Model to evaluate promotability, providing comprehensive data for mentors and leaders to guide career conversations and decisions. More than 2,300 Globers were promoted during the same year, and nearly 400 made lateral moves.
We continue fostering Feedback For Leaders. During this year, over 95% of team leaders received their feedback results based on almost 40,000 assessments sent by Globers all over the world.

We remain committed to continuously enhancing our career value proposition to provide optimal opportunities for our talented employees at Globant.





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Compensation
 
We provide our employees with a comprehensive compensation package comprising a base salary, a Short-Term Bonus, and long-term incentives (for eligible positions), alongside benefits. The variable component of our compensation package is strategically designed to reinforce our organizational values and culture, facilitate employee growth and development, and align with our business objectives of performance-driven remuneration and talent cultivation.

Under the Short-Term Incentive Plan, bonus payout for Globers are contingent upon the attainment of key performance metrics, including individual achievements, managerial evaluations, and Globant's overall performance. For those individuals not eligible for the Short-Term Program, we offer a Top Performer Bonus to recognize outstanding contributions.

Furthermore, we extend a long-term incentive scheme to key personnel in the form of share-based compensation, ensuring alignment of interests between employees and the company's long-term success.

We provide a comprehensive range of benefits designed to support our employees and their families. These include health insurance coverage for both employees and their families, extended parental leave options, fertility treatment support, subsidized company trips to promote team bonding, wellness initiatives such as yoga, relaxation, and massage sessions at the office, as well as access to corporate discount programs at select universities and fitness centers, among other offerings.

2021 Employee Stock Purchase Plan

General

On March 1, 2021, our ESPP became effective. The purpose of the ESPP is to advance the interests of the Company and our shareholders by providing an incentive to attract, retain and reward our eligible employees and by motivating such persons to contribute to the growth and profitability of the Company. The Plan provides such eligible employees with an opportunity to acquire a proprietary interest in the Company through the purchase of the Company’s common shares.

The ESPP is comprised of the Section 423 ESPP and the Non-423 ESPP. The Company intends that the Section 423 ESPP qualify as an “employee stock purchase plan” under Section 423 of the Code (including any amendments or replacements of such section), and the Section 423 ESPP shall be so construed. The Non-423 ESPP, which is not intended to qualify as an “employee stock purchase plan” under Section 423 of the Code, is intended to provide eligible employees employed by non-U.S. subsidiaries with an opportunity to purchase common shares pursuant to the terms and conditions of the ESPP but not necessarily in compliance with the requirements of Section 423 of the Code.

Eligible employees will be allowed to participate in the ESPP with a limit of $25,000 investment per employee per calendar year.

Common Shares Subject to the ESPP

Subject to adjustment as provided in the ESPP, the maximum aggregate number of common shares issuable under the ESPP shall be 100,000 common shares (the “Initial Total Share Pool”), of which 30,000 common shares (the “Initial 423 Pool”) shall be the maximum aggregate number of common shares that may be issued under the Section 423 ESPP. Thereafter, such maximum number of common shares that may be issued under the ESPP shall be cumulatively increased on a pro rata basis, such that the ratio of the Initial Total Share Pool and the Initial 423 Pool remains unchanged, automatically on January 1, 2022 and on each subsequent January 1, through and including January 1, 2031, by a number of common shares (the “Annual Increase”) equal to the smallest of (a) 0.005 (0.5%) of the number of common shares issued and outstanding on the immediately preceding December 31, (b) 200,000 common shares, or (c) an amount determined by our board of directors; such that the number of common shares that may be issued in any case under the ESPP shall not exceed 2,100,000 common shares, of which 630,000 shall be the maximum aggregate number that may be issued under the Section 423 ESPP.

Common shares issued under the ESPP may consist of common shares reacquired in open market purchases. On May 29, 2023, we entered into a 10b5-1 repurchase plan with HSBC Securities (USA) Inc., acting as agent for us, for the repurchase of an aggregate of up to 60,000 common shares. The 10b5-1 repurchase plan will expire on March 8, 2024. Such repurchases would be executed by our board of directors pursuant to the authorization granted by the general meeting of shareholders of the Company on May 31, 2019, according to the conditions set forth in article 430-15 of Luxembourg law of 10 August 1915 on commercial companies, as amended (the “Companies Law”). The Company intends to renew the 10b5-1 plan in furtherance of additional future share repurchases for this purpose.

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Pursuant to such authorization, our board of directors may repurchase up to a maximum number of shares representing 20% of the issued share capital for a net purchase price that is (i) no less than 50% of the lowest stock price and (ii) no more than 50% above the highest stock price, in each case being the closing price, as reported by the New York City edition of the Wall Street Journal, or, if not reported therein, any other authoritative sources to be selected by our board of directors, over the ten trading days preceding the date of the purchase (or the date of the commitment to the transaction). The authorization is valid for a period ending five years from the date of the general meeting or the date of its renewal by a subsequent general meeting of shareholders.

Eligibility

Each employee of a participating company is eligible to participate in the ESPP except (a) with respect to the Section 423 ESPP, any employee who is customarily employed by the participating company group for 20 hours or less per week or for not more than five months in any calendar year, and (b) that with respect to the Non-423 ESPP, our compensation committee may determine that only certain categories of employees of a participating company may be eligible to participate in the ESPP, excluding all other employees of such participating company. However, an employee may not be granted rights to purchase common shares either under the Section 423 ESPP or the Non-423 ESPP, if such employee immediately after the grant would own common shares or options to purchase common shares possessing 5.0% or more of the total combined voting power or value of all classes of our share capital.

Operation of the ESPP; Participant Contributions

The ESPP will typically be implemented through consecutive six-month offering periods, and permits participants to purchase common shares through payroll deductions of up to 10.0% of their eligible compensation, which includes regular base wages or salary, overtime payments, shift premiums and payments for paid time off, but exclusive of sign-on bonuses, annual or other incentive bonuses, commissions, profit-sharing distributions or other incentive-type payments, any contributions made by a participating company on the employee’s behalf to any employee benefit or welfare plan now or hereafter established (other than amounts deferred pursuant to Section 401(k) or Section 125 of the Code), payments in lieu of notice, payments pursuant to a severance agreement, termination pay, moving allowances, relocation payments, or any amounts directly or indirectly paid pursuant to the ESPP or any other share purchase, share option or other share-based compensation.

Notwithstanding the foregoing, where payroll deductions on behalf of participants who are citizens or residents of countries other than the United States (without regard to whether they are also citizens of the United States or resident aliens) are prohibited or made impracticable by applicable local law, our compensation committee may establish a separate offering (a “Non-United States Offering”) covering all eligible employees of one or more participating companies subject to such prohibition or restrictions on payroll deductions. The Non-United States Offering shall provide another method for payment of the purchase price with such terms and conditions as shall be administratively convenient and comply with applicable local law. On each purchase date of the offering period applicable to a Non-United States Offering, each participant who has not withdrawn from the ESPP and whose participation in such offering period has not otherwise terminated before such purchase date shall automatically acquire a number of whole common shares determined in accordance with the applicable provisions of the ESPP to the extent of the total amount of the participant’s ESPP account balance accumulated during the offering period in accordance with the method established by our compensation committee and not previously applied toward the purchase of common shares.

Purchase Price; Timing of Purchases

Amounts deducted and accumulated from participant compensation will be used to purchase common shares at the end of each offering period. Under the terms of the ESPP, with respect to participants in the Section 423 ESPP, the purchase price of the shares shall not be less than 90.0% of the lower of the fair market value of a common share on the first trading day of the offering period or on the purchase date. Subject to adjustment as provided by the ESPP and unless otherwise provided by our compensation committee, the purchase price for each offering period shall be 90.0% of the fair market value of a common share on the purchase date.

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On the offering date of each offering period, each participant in such offering period will be automatically granted an option to purchase the lesser of (a) that number of whole common shares determined by dividing the Dollar Limit (as defined below) by the fair market value of a common share on such offering date or (b) the Share Limit (as defined below). Our compensation committee may, in its discretion and prior to the offering date of any offering period, (i) change the method of, or any of the foregoing factors in, determining the number of common shares subject to purchase rights to be granted on such offering date, or (ii) specify a maximum aggregate number of common shares that may be purchased by all participants in an offering or on any purchase date within an offering period. For the purposes of the ESPP, the “Dollar Limit” shall be determined by multiplying $2,083.33 by the number of months (rounded to the nearest whole month) in the offering period and rounding to the nearest whole dollar, and the “Share Limit” shall be determined by multiplying 200 shares by the number of months (rounded to the nearest whole month) in the offering period and rounding to the nearest whole share.

Notwithstanding any provision of the ESPP to the contrary, no participant (whether participating in the Section 423 ESPP or the Non-423 ESPP) shall be granted a purchase right which permits his or her right to purchase common shares under the ESPP to accrue at a rate which, when aggregated with such participant’s rights to purchase shares under all other employee stock purchase plans of a participating company intended to meet the requirements of Section 423 of the Code, exceeds $25,000 in fair market value (or such other limit, if any, as may be imposed by the Code) for each calendar year in which such purchase right is outstanding at any time. For purposes of the preceding sentence, the fair market value of common shares purchased during a given offering period shall be determined as of the offering date for such offering period.

If insufficient common shares remain available under the ESPP to permit all participants to purchase the number of common shares to which they would otherwise be entitled, our compensation committee will make a pro rata allocation of the available common shares in as uniform a manner as practicable and as the Company determines to be equitable. Any amounts withheld from participants' compensation in excess of the amounts used to purchase common shares will be refunded, without interest.

Administration, Amendment or Termination of the ESPP

In accordance with the terms of the ESPP, our compensation committee will administer the ESPP, including, but not limited to, have full authority to interpret the terms of the ESPP, have the discretion to determine from time to time which subsidiaries shall be participating companies in the ESPP, designate from time to time those participating companies whose eligible employees may participate in the Section 423 ESPP and those participating companies whose eligible employees may participate in the Non-423 ESPP, establish additional or alternative offering periods, different durations for offering periods or different commencing or ending dates for offering periods.

Further, our compensation committee, as administrator of the ESPP, may at any time amend, suspend or terminate the ESPP, except that (a) no such amendment, suspension or termination shall affect purchase previously granted under the ESPP unless expressly provided by the Compensation Committee, and (b) no such amendment, suspension or termination may adversely affect a purchase right previously granted under the ESPP without the consent of the participant, except to the extent permitted by the ESPP or as may be necessary to qualify the ESPP as an employee stock purchase ESPP pursuant to Section 423 of the Code or to comply with any applicable law, regulation or rule. In addition, to the extent required under Section 423 of the Code (or other applicable law, regulation or rule), an amendment to the ESPP must be approved by the shareholders of the Company within 12 months of the adoption of such amendment if such amendment would authorize the sale of more Common Shares than are then authorized for issuance under the ESPP or would change the definition of the corporations that may be designated by the Compensation Committee as "Participating Companies" (as defined in the ESPP). Notwithstanding the foregoing, in the event that the Compensation Committee determines that continuation of the ESPP or an offering would result in unfavorable financial accounting consequences to the Company, the Compensation Committee may, in its discretion and without the consent of any participant, including with respect to an offering period then in progress: (i) terminate the ESPP or any offering period, (ii) accelerate the purchase date of any offering period, (iii) reduce the discount or the method of determining the purchase price in any offering period (e.g., by determining the purchase price solely on the basis of the "Fair Market Value" (as defined in the ESPP) on the purchase date), (iv) reduce the maximum number of common shares that may be purchased in any offering period, or (v) take any combination of the foregoing actions.

In the event of a change in control, an acquiring or successor corporation may assume the Company’s rights and obligations under outstanding purchase rights or substitute substantially equivalent purchase rights. If the acquiring or successor corporation does not assume or substitute for outstanding purchase rights, then the purchase date of the offering periods then in progress will be accelerated to a date prior to the change in control.

The ESPP will continue in effect until terminated by the administrator.
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On March 12, 2021, the administrator approved the participation in the Section 423 ESPP and Non-423 ESPP by several of the company's subsidiaries, pursuant to the following terms and conditions:

Eligibility. In addition to those employees excluded under the plan, trainees or college trainees and fixed-term employees will also be excluded from the plan.

Offering periods. Each offering period will have a 6 months duration; provided that in respect to Sistemas UK Limited, Sistemas Globales Uruguay S.A. and Difier S.A., their first offering period will have a 5 months duration, commencing on April 1st, 2021; and in respect of IAFH Global S.A., Sistemas Globales S.A., Globers S.A., Dynaflows S.A., Avanxo S.A., BSF S.A., Xappia S.R.L., Decision Support S.A. and Banking Solutions S.A., the offering periods will have 1 month duration, and shall reiterate every 3 months, starting on June 1st, 2021.

Purchase price. 90% of the common shares "fair market value" (as defined in the plan). The amount to be deducted from the compensation of the participant will be in rounded percentages of not less than 1% and not more than 10%, at the participant's discretion; provided that in respect of IAFH Global S.A., Sistemas Globales S.A., Globers S.A., Dynaflows S.A., Avanxo S.A., BSF S.A., Xappia S.R.L., Decision Support S.A. and Banking Solutions S.A., the amount to be deducted from the compensation of the participant will be in rounded percentages of not less than 1% and not more than 30%, at the participant's discretion.

In connection with the plan, the administrator approved the repurchase of up to 100,000 common shares, which number of common shares is automatically increased on the first day of each year for a period of ten years beginning on 2022, in an amount equal to the smallest of: (a) 0.5% of the number of common shares issued and outstanding on the immediately preceding 31 December or (b) 200,000 common shares; that as of the date of this annual report represents an aggregate of 700,000 common shares. Until December 31, 2023, the administrator has repurchased 116,000 common shares, and has delivered 94,745 common shares under the plan.

2021 Stock-Equivalent Units

On December 1, 2021, the compensation committee, as administrator, approved the granting of awards in the form of stock-equivalent units to be settled in cash or common shares, or a combination thereof, under the 2014 Equity Incentive Plan for the equivalent to 26,000 common shares, subject to the following terms and conditions:

Purpose. We believe that the initiative will provide an incentive to attract, retain and reward talent in the IT industry, and would prompt the eligible employees to further contribute to the growth and profitability of the company.

Eligibility. All employees in Technology and Delivery Levels 5 and up, who (a) are regular employees on the payroll of any of the company’s subsidiaries, (b) have no awards under the 2014 Equity Incentive Plan vesting pending in 2021, and (c) have an overall positive evaluation for the 2021 calendar year.

Granting. The initiative will consist in the granting of SEUs with a unit value equivalent to the market value of one common share of the company at the closing price of the trading day prior to the date of the grant; provided that the number of SEUs to be granted to each eligible employee will be equivalent to 25% of such employee’s total 12-month salary at the time of the grant.

Settlement. The SEUs will be settled in cash or common shares of the company, at the option of the eligible employee, and shall vest during a four-year period, in four equal annual installments of 25% each, commencing on the first anniversary of the grant date, so long as the relevant eligible employee is then an employee of any of the company’s subsidiaries, out of which 60% will be tied to retention and 40% will be tied to performance based on the short-term bonus results for the year 2022. The common shares to be delivered under the SEUs may consist of treasury and/or newly-issued common shares.

On March 3, 2022, the compensation committee, as administrator, approved the granting of up to 45,000 additional stock-equivalent units awards in the form of SEUs and PSEUs, 50% of which will be in the form of PSEUs and 50% of which will be in the form of SEUs (except as otherwise committed with newly hired employees or other relevant beneficiaries). The compensation committee further approved that the maximum number of authorized stock-equivalent units may be increased to the extent that the total share-based compensation of the Company during 2022 does not exceed an amount equal to 3.2% of the Company's consolidated revenues during 2022.

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From its adoption until the date of this annual report, we have granted to eligible employees 37,983 SEUs and PSEUs, net of any cancelled and/or forfeited awards. Of the stock-equivalent units granted, 50% were in the form of PSEUs and 50% were in the form of SEUs. There were 28,059 and 57,258 SEUs and PSEUs outstanding as of December 31, 2023 and December 31, 2022, respectively.


E. Share Ownership

Share Ownership

The total number of shares of the Company beneficially owned by our directors and executive officers, as of the date of this annual report, was 1,117,915 (includes common shares subject to options that are currently exercisable or will be exercisable, and/or issuable upon settlement of RSUs that have vested or will vest, within 60 days of February 10, 2024), which represents 2.58% of the total shares of the Company (including common shares subject to options that are currently exercisable within 60 days of February 10, 2024). See table in “Major Shareholders and Related Party Transactions — Major Shareholders.”
 
Share Options
 

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders
 
The following table sets forth information regarding beneficial ownership of our common shares as of December 31, 2023 by:
 
each of our directors and members of senior management individually;
all directors and members of senior management as a group; and
each shareholder whom we know to own beneficially more than 5% of our common shares.

As of December 31, 2023, we had 43,241,192 issued and outstanding common shares. Beneficial ownership for the purposes of the following table is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof, to receive the economic benefit of ownership of the securities, or has the right to acquire such powers within 60 days. Common shares subject to options, RSUs, warrants or other convertible or exercisable securities that are currently convertible or exercisable or convertible or exercisable within 60 days of February 10, 2024 are deemed to be outstanding and beneficially owned by the person holding such securities. Common shares issuable pursuant to share options or warrants are deemed outstanding for computing the percentage ownership of the person holding such options or warrants but are not outstanding for computing the percentage of any other person. To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all of our common shares. As of February 10, 2024, we had 160 holders of record in the United States with approximately 96% of our issued and outstanding common shares.
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NumberPercent
Martín Migoya (1)
302,474*
Guibert Englebienne (2)
325,738*
Martín Umaran (3)
417,321*
Francisco Álvarez-Demalde (4)
17,002*
Linda Rottenberg (5)
2,633*
Philip A. Odeen (6)
152*
Maria Pinelli (7)
922*
Andrea Mayumi Petroni Merhy (8)
539*
Juan Ignacio Urthiague (9)
9,229*
Patricia Pomies 8,005*
Yanina Maria Conti (10)
2,093*
Patricio Pablo Rojo 5,345*
Wanda Weigert (11)
18,002*
Diego Tártara 8,460*
All Directors and Senior Management as a group1,117,9152.58 %
*Less than 1%
5% or More Shareholders:
T. Rowe Price Associates, Inc. (12)
3,951,741 9.14 %
Wasatch Advisors, LP (13)
3,145,883 7.28 %
BlackRock, Inc. (14)
2,739,082 6.33 %
J.P. Morgan Chase & Co (15)
2,292,516 5.30 %

*    Represents beneficial ownership of less than 1%.
(1)Includes 30,500 common shares issuable upon exercise of vested options and settlement of RSUs, as applicable, and 147,040 common shares held by a revocable trust formed under Wyoming law (the “Revocable Migoya Trust Shares”) by Mr. Migoya that was established for the benefit of Mr. Migoya, his wife and certain charitable organizations. Subsequently, the trust transferred its Revocable Migoya Trust Shares to a BVI company wholly owned by the trust. Angerona Trust Company LLC acts as the independent trustee of the trust. Angerona Group Administration Limited is the sole director of the BVI company and holds voting and dispositive power over the 147,040 common shares held by such entity.
(2)Includes 62,500 common shares issuable upon exercise of vested options and settlement of RSUs, as applicable, and 127,166 common shares held by a revocable trust formed under Wyoming law (the “Revocable Englebienne Trust Shares”) by Mr. Englebienne that was established for the benefit of Mr. Englebienne, his wife and certain charitable organizations. Subsequently, the trust transferred its Revocable Englebienne Trust Shares to a BVI company wholly owned by the trust. Angerona Trust Company LLC acts as the independent trustee of the trust. Angerona Group Administration Limited is the sole director of the BVI company and holds voting and dispositive power over the 127,166 common shares held by such entity.
(3)Includes 37,500 common shares issuable upon exercise of vested options and settlement of RSUs, as applicable, and 259,241 common shares held by a revocable trust formed under Wyoming law (the “Revocable Umaran Trust Shares”) by Mr. Umaran that was established for the benefit of Mr. Umaran, his wife and certain charitable organizations. Subsequently, the trust transferred its Revocable Umaran Trust Shares to a BVI company wholly owned by the trust. Angerona Trust Company LLC acts as the independent trustee of the trust. Angerona Group Administration Limited is the sole director of the BVI company and holds voting and dispositive power over the 259,241 common shares held by such entity.
(4)Includes 152 common shares issuable upon exercise of vested options and settlement of RSUs, as applicable.
(5)Includes 152 common shares issuable upon exercise of vested options and settlement of RSUs, as applicable.
(6)Includes 152 common shares issuable upon exercise of vested options and settlement of RSUs, as applicable.
(7)Includes 152 common shares issuable upon exercise of vested options and settlement of RSUs, as applicable.
(8)Includes 152 common shares issuable upon exercise of vested options and settlement of RSUs, as applicable.
(9)Includes 1,500 common shares issuable upon exercise of vested options and settlement of RSUs, as applicable.
(10)Includes 1,000 common shares issuable upon exercise of vested options and settlement of RSUs, as applicable.
(11)Includes 15,000 common shares issuable upon exercise of vested options and settlement of RSUs, as applicable.
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(12)Based on a Schedule 13G/A filed with the SEC on February 14, 2024, T. Rowe Price Associates, Inc. beneficially owns 3,951,741 of our common shares; has sole voting power with respect to 1,000,129 shares, and sole dispositive power with respect to 3,951,741 shares. T. Rowe Price New Horizons Fund, Inc. reported that it has sole voting power with respect to 2,368,327 shares. The address of T. Rowe Price Associates, Inc. and T. Rowe Price New Horizons Fund, Inc. is 100 E. Pratt Street, Baltimore, MD 21202.
(13)Based on a Schedule 13G/A filed with the SEC on February 9, 2024, Wasatch Advisors, LP beneficially owns 3,145,883 of our common shares, and has sole and dispositive power with respect to all of such shares. The address of Wasatch Advisors, LP's principal business office is 505 Wakara Way, Salt Lake City, UT 84108.
(14)Based on a Schedule 13G/A filed with the SEC on February 2, 2024, BlackRock, Inc. beneficially owns 2,739,082 of our common shares; has sole voting power with respect to 2,645,308 shares, and sole dispositive power with respect to 2,739,082 shares. The address of BlackRock, Inc.'s principal business office is 50 Hudson Yards, New York, NY 10001.
(15)Based on a Schedule 13G filed with the SEC on January 10, 2024, J.P. Morgan Chase & Co. beneficially owns 2,292,516 of our common shares; has sole voting power with respect to 1,947,932 shares, and shared voting power with respect to 15,156 shares. It has sole dispositive power with respect to 2,292,516 shares. The address of J.P. Morgan Chase & Co.´s principal business office is 383 Madison Avenue, New York, NY 10179.

B. Related Party Transactions

For a summary of our revenue and expenses and receivables and payables with related parties, please see note 24 to our audited consolidated financial statements.
 
Procedures for Related Party Transactions
 
On July 23, 2014, we adopted a written code of business conduct and ethics for our company, which was amended on January 26, 2022. Under our code of business conduct and ethics, our employees, officers and directors are discouraged from entering into any transaction that may cause a conflict of interest for us. In addition, they must report any potential conflict of interest, including related party transactions, to their managers or our corporate counsel who then will review and summarize the proposed transaction for our audit committee. Pursuant to its charter, our audit committee is required to then approve any related-party transactions, including those transactions involving our directors. In approving or rejecting such proposed transactions, the audit committee is required to consider the relevant facts and circumstances available and deemed relevant to the audit committee, including the material terms of the transactions, risks, benefits, costs, availability of other comparable services or products and, if applicable, the impact on a director’s independence. Our audit committee will approve only those transactions that, in light of known circumstances, are in, or are not inconsistent with, our best interests, as our audit committee determines in the good faith exercise of its discretion.
 
On November 5, 2015, we adopted a related party transactions policy, as amended by the Audit Committee. This policy indicates, based on certain specific parameters, which transactions should be submitted for approval by either our Audit Committee or our general counsel.
 
C. Interests of Experts and Counsel
 
Not applicable.
 
















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ITEM 8.  FINANCIAL INFORMATION

A. Consolidated statements and other financial information.

We have included the Consolidated Financial Statements as part of this annual report. See Item 18, "Financial Statements."
Legal Proceedings
 
We may be involved in litigation in the normal course of our business, both as a defendant and as a plaintiff. In the ordinary course of our business, we are subject to certain contingent liabilities with respect a variety of potential claims, lawsuits and other proceedings, including claims related to patent infringement, purported class actions, tax and labor lawsuits. In particular, in the software and technology industries, other companies own large numbers of patents, copyrights, trademarks and trade secrets and frequently engage in litigation based on allegations of infringement or other violations of intellectual property rights. We have received and may continue to receive assertions and claims that our services infringe on these patents or other intellectual property rights. See “Key Information - Risk Factors — Risks Related to Our Business and Industry — If we incur any liability for a violation of the intellectual property rights of others, our reputation, business, financial condition and prospects may be adversely affected.”
 
In 2018, certain of our non-U.S. subsidiaries became under examination by the U.S. Internal Revenue Service ("IRS") regarding payroll and employment taxes primarily in connection with services performed by employees of certain of our subsidiaries in the United States between 2013 and 2015. During the fourth quarter of 2021, the IRS and our subsidiaries have reached a preliminary agreement on the proposed assessments, which would amount to $1.3 million, including applicable interests and penalties. On March 16, 2022, the Company paid $961 in principal and is waiting for final confirmation on the amounts of the applicable interests and penalties to settle this matter definitively.

Between 2010 and 2014, certain of Grupo Assa’s Brazilian subsidiaries were subject to two examinations by the Ministry of Labor (“MTE”) and the Brazilian Internal Revenue Service (“RFB”) in relation to the potential hiring of employees as independent contractors. As a result of such examinations, Grupo Assa's Brazilian subsidiaries are subject to different administrative and judicial proceedings, seeking to collect payment of taxes and social security contributions allegedly owed by the companies, and imposing certain associated fines. Under the equity purchase agreement entered into for the acquisition of Grupo ASSA Worldwide S.A. and its affiliates (collectively, “Grupo Assa”), certain of these proceedings are subject to indemnification provisions from the sellers. As of December 31, 2023, some of the administrative proceedings are still ongoing and some have resulted in judicial proceedings.

In addition to the foregoing, as of December 31, 2023, we are a party to certain other legal proceedings, including tax and labor claims, where the risk of loss is considered possible. In the opinion of our management, the ultimate disposition of such threatened and/or pending matters, either individually or on a combined basis, is not likely to have a material effect on our financial condition, liquidity or results of operations.
 
Dividend Policy
 
We currently anticipate that we will retain all available funds for use in the operation and expansion of our business, and do not anticipate paying any dividends in the foreseeable future.
 
Under Luxembourg law, at least 5% of our net income per year must be allocated to the creation of a legal reserve until such reserve reaches an amount equal to 10% of our issued share capital. If the legal reserve subsequently falls below the 10% threshold, 5% of the net income must be allocated again toward the reserve until the 10% threshold is reached. If the legal reserve exceeds 10% of our issued share capital, the legal reserve may be reduced. The legal reserve is not available for distribution.
 
We are a holding company and have no material assets other than direct and indirect ownership of our operating and non-operating subsidiaries. If we were to distribute a dividend at some point in the future, we would cause the operating subsidiaries to make distributions in an amount sufficient to cover any such dividends.

B. Significant Changes

As of the date of this annual report we have no significant changes to inform.



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ITEM 9. THE OFFER AND LISTING

A. Offering and listing details.
 
Our ordinary shares began trading on the NYSE under the symbol "GLOB" in connection with our IPO on July 18, 2014.

B. Plan of Distribution
 
Not applicable.
 
C. Markets

Our ordinary shares began trading on the NYSE under the symbol "GLOB" in connection with our IPO on July 18, 2014. See "The Offer and Listing - Offering and Listing Details."
 
D. Selling Shareholders
 
Not applicable.
 
E. Dilution
 
Not applicable.
 
F. Expenses of the Issue
 
Not applicable.
 
ITEM 10. ADDITIONAL INFORMATION.
 
A. Share capital
 
Not applicable.
 
B. Memorandum and Articles of Association
 
The following is a summary of some of the terms of our common shares, based on our articles of association.

The following summary is not complete and is subject to, and is qualified in its entirety by reference to, the provisions of our articles of association, as amended, which are included as Exhibit 1.1 to this Annual Report, and applicable Luxembourg law, including Luxembourg Companies Law.
 
General
 
We are a Luxembourg joint stock company (société anonyme) and our legal name is "Globant S.A." We were incorporated on December 10, 2012. We are registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés de Luxembourg) under number B 173 727 and have our registered office at 37A Avenue J.F. Kennedy, L-1855, Luxembourg, Grand Duchy of Luxembourg.
 
Share Capital
 
As of December 31, 2023, our issued share capital was $51,889,430.40, represented by 43,241,192 common shares with a nominal value of $1.20 each, of which 154,910 were treasury shares held by us.
 
We had an authorized share capital, excluding the issued share capital, of $4,168,863.60, consisting of 3,474,053 common shares with a nominal value of $1.20 each.
 
Our shareholders' meeting has authorized our board of directors to issue common shares within the limits of the authorized share capital at such time and on such terms as our board of directors may decide during a period ending on the fifth anniversary of the extraordinary general meeting of shareholders held on April 19, 2023, which may be renewed. Accordingly, as of December 31, 2023, our board of directors may issue up to 3,474,053 common shares.
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Our authorized share capital is determined by our articles of association, as amended from time to time, and may be increased or reduced by amending the articles of association by a two-thirds majority of the vote at a quorate extraordinary general shareholders' meeting. Under Luxembourg law, our shareholders have no obligation to provide further capital to us.
 
Under Luxembourg law, our shareholders benefit from a pre-emptive subscription right on the issuance of common shares for cash consideration. However, our shareholders have, in accordance with Luxembourg law authorized our board of directors to waive, suppress or limit, any pre-emptive subscription rights of shareholders provided by law to the extent our board of directors deems such waiver, suppression or limitation advisable for any issue or issues of common shares within the scope of our authorized share capital. Such common shares may be issued above, at or below market value as well as above, at or below nominal value by way of incorporation of available reserves (including premium).

Form and Transfer of Common Shares
 
Our common shares are issued in registered form only and are freely transferable under Luxembourg law and our articles of association. Luxembourg law does not impose any limitations on the rights of Luxembourg or non-Luxembourg residents to hold or vote our common shares.
 
Under Luxembourg law, the ownership of registered shares is established by the entry of the name of the shareholder and the number of shares held by him or her in the shareholder register. Transfers of common shares not deposited into securities accounts are effective towards us and third parties either through the recording of a declaration of transfer into the shareholders' register, signed and dated by the transferor and the transferee or their representatives or by us, upon notification of the transfer to, or upon the acceptance of the transfer by, us. Should the transfer of common shares not be recorded accordingly, the shareholder is entitled to enforce his or her rights by initiating the relevant proceedings before the competent courts of Luxembourg.
 
In addition, our articles of association provide that our common shares may be held through a securities settlement system or a professional depositary of securities. The depositor of common shares held in such manner has the same rights and obligations as if such depositor held the common shares directly. Common shares held through a securities settlement system or a professional depositary of securities may be transferred from one account to another in accordance with customary procedures for the transfer of securities in book-entry form. However, we will make dividend payments (if any) and any other payments in cash, common shares or other securities (if any) only to the securities settlement system or the depositary recorded in the shareholders’ register or in accordance with their instructions.

Issuance of Common Shares
 
Pursuant to Luxembourg Companies Law, the issuance of common shares requires the amendment of our articles of association by the approval of two-thirds of the votes at a quorate extraordinary general shareholders' meeting; provided, however, that the general meeting may approve an increase in the authorized share capital and authorize our board of directors to issue common shares up to the maximum amount of such authorized unissued share capital for a five year period beginning either on the date of the relevant general meeting or the date of publication in the RESA of the minutes of the relevant general meeting approving such authorization. The general meeting may amend or renew such authorized share capital and such authorization of our board of directors to issue common shares.
 
As of December 31, 2023, we had an authorized share capital, excluding the issued share capital, of $4,168,836.60 and our board of directors was authorized to issue up to 3,474,053 common shares (subject to stock splits, consolidation of common shares or like transactions) with a nominal value of $1.20 per common share.

Our articles of association provide that no fractional shares will be issued or exist.
 
Pre-emptive Rights
 
Unless limited, waived or canceled by our board of directors in the context of the authorized share capital or pursuant to a decision of an extraordinary general meeting of shareholders issued in accordance with the provisions of the articles of association relating to amendments thereof, holders of our common shares have a pro rata pre-emptive right to subscribe for any new common shares issued for cash consideration. Our articles of association provide that pre-emptive rights can be waived, suppressed or limited by our board of directors for a period ending on the fifth anniversary of the date of extraordinary general meeting of shareholders held on April 19, 2023, which period therefore ends on April 19, 2028, in the event of an increase of the issued share capital by our board of directors within the limits of the authorized share capital.

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Repurchase of Common Shares
 
We cannot subscribe for our own common shares. We may, however, repurchase issued common shares or have another person repurchase issued common shares for our account, subject to the following conditions:
 
the repurchase complies with the principle of equal treatment of all shareholders, except in the event such repurchase was the result of the unanimous decision of a general meeting at which all shareholders were present or represented (in addition, listed companies may repurchase their own shares on the stock exchange without an offer to repurchase having to be made to the shareholders);
prior authorization by a simple majority vote at an ordinary general meeting of shareholders is granted, which authorization sets forth the terms and conditions of the proposed repurchase, including the maximum number of common shares to be repurchased, the duration of the period for which the authorization is given (which may not exceed five years) and, in the case of a repurchase for consideration, the minimum and maximum consideration per common share;
the repurchase does not reduce our net assets (on a non-consolidated basis) to a level below the aggregate of the issued share capital and the reserves that we must maintain pursuant to Luxembourg law or our articles of association; and
only fully paid-up common shares are repurchased.

No prior authorization by our shareholders is required for us to repurchase our own common shares if: 

we are in imminent and severe danger, in which case our board of directors must inform the general meeting of shareholders held subsequent to the repurchase of common shares of the reasons for, and aim of, such repurchase, the number and nominal value of the common shares repurchased, the fraction of the share capital such repurchased common shares represented and the consideration paid for such shares; or
the common shares are repurchased by us or by a person acting for our account in view of a distribution of the common shares to our employees.

On May 31, 2019, the general meeting of shareholders, according to the conditions set forth in article 430-15 of Luxembourg Companies Law, granted our board of directors the authorization to repurchase up to a maximum number of shares representing 20% of the share capital for a net purchase price being (i) no less than 50% of the lowest stock price and (ii) no more than 50% above the highest stock price, the stock price in all cases being the closing price, as reported by the New York City edition of the Wall Street Journal, or, if not reported therein, any other authoritative sources to be selected by our board of directors, within the ten trading days preceding the date of the purchase (or the date of the commitment to the transaction). The authorization is valid for a period ending five years from the date of the general meeting or the date of period´s renewal by a subsequent general meeting of shareholders. Pursuant to such authorization, our board of directors is authorized to acquire and sell our common shares under the conditions set forth in the minutes of such general meeting of shareholders. Such purchases and sales may be carried out for any purpose authorized by the general meeting of Globant S.A.

On May 29, 2023, we entered into a 10b5-1 repurchase plan with HSBC Securities (USA) Inc., acting as agent for the Company, for the repurchase of an aggregate of up to 60,000 common shares in four windows, starting on July 18th, 2023 and ending on March 5th, 2024. The repurchase plan will expire on March 8, 2024.

Capital Reduction
 
Our articles of association provide that our issued share capital may be reduced by a resolution adopted by a two-thirds majority of the votes at a quorate extraordinary general shareholders' meeting. If the reduction of capital results in the capital being reduced below the legally prescribed minimum, the general meeting of the shareholders must, at the same time, resolve to increase the capital up to the required level.
 
General Meeting of Shareholders

Any regularly constituted general meeting of our shareholders represents the entire body of shareholders.

Each of our common shares entitles the holder thereof to attend our general meeting of shareholders, either in person or by proxy, to address the general meeting of shareholders and to exercise voting rights, subject to the provisions of Luxembourg law and our articles of association. Each common share entitles the holder to one vote at a general meeting of shareholders. Our articles of association provide that our board of directors shall adopt as it deems fit all other regulations concerning the attendance to the general meeting.
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A general meeting of our shareholders may, at any time, be convened by our board of directors, to be held at such place and on such date as specified in the convening notice of such meeting. Our articles of association and Luxembourg law provide that a general meeting of shareholders must be convened by our board of directors, upon request in writing indicating the agenda, addressed to our board of directors by one or more shareholders representing at least 10% of our issued share capital. In such case, a general meeting of shareholders must be convened and must be held within a period of one month from receipt of such request. One or more shareholders holding at least 5% of our issued share capital may request the addition of one or more items to the agenda of any general meeting of shareholders and propose resolutions. Such requests must be received at our registered office by registered mail at least 22 days before the date of such meeting.

Our articles of association provide that if our common shares are listed on a stock exchange, all shareholders recorded in any register of our shareholders are entitled to be admitted and vote at the general meeting of shareholders based on the number of shares they hold on a date and time preceding the general meeting of shareholders as may be established on the record date for admission to the general meeting of shareholders (the "Record Date"), which the board of directors will determine in the convening notice. Furthermore, any shareholder, holder or depositary, as the case may be, who wishes to attend the general meeting must inform us thereof no later than on the third business day preceding the date of such general meeting, or by any other date which the board of directors may determine and specify the convening notice, in a manner to be determined by our board of directors in the notice convening the general meeting of the shareholders. In the case of common shares held through the operator of a securities settlement system or with a depositary, or sub-depositary designated by such depositary, a shareholder wishing to attend a general meeting of shareholders should receive from such operator or depositary a certificate certifying the number of common shares recorded in the relevant account on the Record Date. The certificate should be submitted to us at our registered office no later than three business days prior to the date of such general meeting. In the event that the shareholder votes by means of a proxy, the proxy must be deposited at our registered office or with any of our agents, duly authorized to receive such proxies. Our board of directors may set a shorter period for the submission of the certificate or the proxy in which case this will be specified in the convening notice.

The convening of, and attendance to, our general meetings is subject to the provisions of the Luxembourg Companies Law.

General meetings of shareholders will be convened in accordance with the provisions of our articles of association and the Luxembourg Companies Law and the requirement of any stock exchange on which our shares are listed. The Luxembourg Companies Law provides -inter alia- that convening notices for every general meeting will contain the agenda and must take the form of announcements filed with the register of commerce and companies, published on the RESA, and published in a Luxembourg newspaper at least 15 days before the meeting. As all our common shares are in registered form, we may decide to send the convening notice only by registered mail to the registered address of each shareholder no less than eight days before the meeting. In that case, the legal requirements regarding the publication of the convening notice in the RESA and in a Luxembourg newspaper do not apply.

In the event (i) an extraordinary general meeting of shareholders is convened to vote on an extraordinary resolution (See below under "Voting Rights" for additional information), (ii) such meeting is not quorate and/or (iii) a second meeting is convened, the second meeting will be convened as specified above.

Pursuant to our articles of association, if all shareholders are present or represented at a general meeting of shareholders and state that they have been informed of the agenda of the meeting, the general meeting of shareholders may be held without prior notice.

Our annual general meeting is held on the date set forth in the corresponding convening notice within six months of the end of each financial year at our registered office or such other place as specified in such convening notice.
 
Voting Rights
 
Each share entitles the holder thereof to one vote at a general meeting of shareholders.

Luxembourg law distinguishes between ordinary resolutions and extraordinary resolutions.

Ordinary Resolutions. Pursuant to our articles of association and the Luxembourg Companies Law, ordinary resolutions shall be adopted by a simple majority of votes validly cast on such resolution at a general meeting. Abstentions and nil votes will not be taken into account.

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Extraordinary Resolutions. Extraordinary resolutions are required for any of the following matters, among others: (a) an increase or decrease of the authorized share capital or issued share capital, (b) a limitation or exclusion of preemptive rights, (c) an approval of a merger (fusion) or de-merger (scission), (d) a dissolution, (e) an amendment to our articles of association and (f) a change of nationality. Pursuant to Luxembourg law and our articles of association, for any extraordinary resolutions to be considered at a general meeting, the quorum must be at least 50% of our issued share capital. Any extraordinary resolution will be adopted at a quorate general meeting upon a two-thirds majority of the votes validly cast on such resolution. In case such quorum is not reached, a second meeting may be convened by our board of directors in which no quorum is required, and which must still approve the amendment with two-thirds of the votes validly cast. Abstentions and nil votes will not be taken into account.

Appointment and Removal of Directors. Members of our board of directors are elected by ordinary resolution at a general meeting of shareholders. Under our articles of association, all directors are elected for a period of up to four years, provided, however, that our directors will be elected on a staggered basis. Any director may be removed with or without cause and with or without prior notice by a simple majority vote at any general meeting of shareholders. The articles of association provide that, in case of a vacancy, our board of directors may fill such vacancy on a temporary basis by a person appointed by the remaining members of our board of directors until the next general meeting of shareholders, which will resolve on a permanent appointment. The directors will be eligible for re-election indefinitely.

Neither Luxembourg law nor our articles of association contain any restrictions as to the voting of our common shares by non-Luxembourg residents.

Amendment to Articles of Association
 
Shareholder Approval Requirements. Luxembourg law requires that an amendment to our articles of association be made by extraordinary resolution. The agenda of the general meeting of shareholders must include the proposed amendments to the articles of association.

Pursuant to Luxembourg Companies Law and our articles of association, for an extraordinary resolution to be considered at a general meeting, the quorum must be at least 50% of our issued share capital. Any extraordinary resolution will be adopted at a quorate general meeting (unless otherwise required by law) upon a two-thirds majority of the votes validly cast on such resolution. If the quorum of 50% is not reached at this meeting, a second general meeting may be convened, in which no quorum is required, and may approve the resolution at a majority of two-third of votes validly cast.

Formalities. Any resolutions to amend the articles of association or to approve a merger, de-merger, change of nationality, dissolution or change of nationality must be made before a Luxembourg notary and such amendments must be published in accordance with Luxembourg law.

Merger and Division
 
A merger by absorption whereby one Luxembourg company, after its dissolution without liquidation, transfers to another company all of its assets and liabilities in exchange for the issuance of common shares in the acquiring company to the shareholders of the company being acquired, or a merger effected by transfer of assets to a newly incorporated company, must, in principle, be approved at a general meeting of shareholders by an extraordinary resolution of the Luxembourg company, and the general meeting of shareholders must be held before a Luxembourg notary. Further conditions and formalities under Luxembourg law are to be complied with in this respect.
 
Liquidation
 
In the event of our liquidation, dissolution or winding-up, the assets remaining after allowing for the payment of all liabilities will be paid out to the shareholders pro rata according to their respective shareholdings. Generally, the decisions to liquidate, dissolve or wind-up require the passing of an extraordinary resolution at a general meeting of our shareholders, and such meeting must be held before a Luxembourg notary.







 
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Mandatory Bid, Squeeze-Out and Sell-Out Rights

Mandatory Bid. In accordance with the provisions of article 8 of our articles of association any person (the "Bidder") wishing to acquire by any means (including, but not limited to, the conversion of any financial instrument convertible into common shares), directly or indirectly, common shares of our Company (which, when aggregated with his/her/its existing common share holdings, together with any shares held by a person controlling the Bidder, controlled by the Bidder and/or under common control with the Bidder, represent at least thirty-three point thirty-three percent (33.33%) of the share capital of the Company (the "Threshold"), will have the duty to propose an unconditional takeover bid to acquire the entirety of the then-outstanding common shares together with any financial instrument convertible into common shares (the "Takeover Bid").

The consideration for each common share and financial instrument convertible into common shares payable to each holder thereof will be the same as, payable in cash only, and not lower than the highest of the following prices:

(a) the highest price per common shares and financial instrument convertible into common shares paid by the Bidder, or on behalf thereof, in relation to any acquisition of common shares and the financial instruments convertible into common shares within the twelve months period immediately preceding the takeover notice, adjusted as a consequence of any division of shares, stock dividend, subdivision or reclassification affecting or related to common shares and/or the financial instruments convertible into common shares; or

(b) the highest closing sale price, during the sixty-day period immediately preceding the takeover notice, of a common share of our Company as quoted by the New York Stock Exchange, in each case as adjusted as a consequence of any division of shares, stock dividend, subdivision or reclassification affecting or related to common shares and financial instrument convertible into common shares.

Squeeze-out right and sell out right. As a result of our common shares having been listed and admitted to trading on the regulated market of the Luxembourg Stock Exchange ("LuxSE") until July 31, 2019, we remain subject to the provisions of the Luxembourg law of July 21, 2012 on mandatory squeeze-out and sell-out of securities of companies admitted or having been admitted to trading on a regulated market or which have been subject to a public offer (the "Luxembourg Mandatory Squeeze-Out and Sell-Out Law"), which shall continue to be applicable to the Company until July 31, 2024; provided that, no new listing on a regulated market (within the meaning of Directive 2014/65/EU) will occur until the aforementioned date. The Luxembourg Mandatory Squeeze-Out and Sell-Out Law provides that, subject to the conditions set forth therein being met, if any individual or legal entity, acting alone or in concert with another, holds a number of shares or other voting securities representing at least 95% of our voting share capital and 95% of our voting rights: (i) such holder may require the holders of the remaining shares or other voting securities to sell those remaining securities (the "Mandatory Squeeze-Out"); and (ii) the holders of the remaining shares or securities may require such holder to purchase those remaining shares or other voting securities (the "Mandatory Sell-Out"). The Mandatory Squeeze-Out and the Mandatory Sell-Out must be exercised at a fair price according to objective and adequate methods applying to asset disposals. The procedures applicable to the Mandatory Squeeze-Out and the Mandatory Sell-Out are subject to further conditions and must be carried out under the supervision of the Commission de Surveillance du Secteur Financier (the "CSSF").

No Appraisal Rights
 
Neither Luxembourg law nor our articles of association provide for any appraisal rights of dissenting shareholders.
 
Distributions
 
Subject to Luxembourg law, if and when a dividend is declared by the general meeting of shareholders or an interim dividend is declared by our board of directors, each common share is entitled to participate equally in such distribution of funds legally available for such purposes. Pursuant to our articles of association, our board of directors may pay interim dividends, subject to Luxembourg law.
 
Declared and unpaid distributions held by us for the account of the shareholders will not bear interest. Under Luxembourg law, claims for unpaid distributions will lapse in our favor five years after the date such distribution became due and payable.
 
Any amount payable with respect to dividends and other distributions declared and payable may be freely transferred out of Luxembourg, except that any specific transfer may be prohibited or limited by anti-money laundering regulations, freezing orders or similar restrictive measures.

 
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Annual Accounts
 
Under Luxembourg law, our board of directors must prepare annual accounts and consolidated accounts. Except for certain cases as provided for by Luxembourg law, our board of directors must also annually prepare management reports on the annual accounts and consolidated accounts. The annual accounts, the consolidated accounts, management reports and auditor's reports must be available for inspection by shareholders at our registered office and on our website for an uninterrupted period beginning at least eight calendar days prior to the date of the annual ordinary general meeting of shareholders.
 
The annual accounts and consolidated accounts are audited by an approved statutory auditor (réviseur d'entreprises agréé).
 
The annual accounts and the consolidated accounts, will be filed with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés of Luxembourg).

Information Rights
 
Luxembourg law gives shareholders limited rights to inspect certain corporate records prior to the date of the annual ordinary general meeting of shareholders, including the annual accounts with the list of directors and auditors, the consolidated accounts, the notes to the annual accounts and the consolidated accounts, a list of shareholders whose common shares are not fully paid up, the management reports, the auditor's report and, in case of amendments to the articles of association, the text of the proposed amendments and the draft of the resulting consolidated articles of association.
 
In addition, any registered shareholder is entitled to receive, upon request, a copy of the annual accounts, the consolidated accounts, the auditor's reports and the management reports free of charge prior to the date of the annual ordinary general meeting of shareholders.
 
Board of Directors
 
Globant S.A. is managed by our board of directors which is vested with the broadest powers to take any actions necessary or useful to fulfill our corporate purpose with the exception of actions reserved by law or our articles of association to the general meeting of shareholders. Our articles of association provide that our board of directors must consist of at least seven members and no more than fifteen members. Our board of directors meets as often as company interests require.

A majority of the members of our board of directors present or represented at a board meeting constitutes a quorum, and resolutions are adopted by the simple majority vote of our board members present or represented. In the case of a tie, the chairman of our board shall have the deciding vote. Our board of directors may also make decisions by means of resolutions in writing signed by all directors.

Directors are elected by the general meeting of shareholders, and appointed for a period of up to four years; provided, however, that directors are elected on a staggered basis, with one-third of the directors being elected each year; and provided, further, that such term may be exceeded by a period up to the annual general meeting held following the fourth anniversary of the appointment, and each director will hold office until his or her successor is elected. The general shareholders' meeting may remove one or more directors at any time, without cause and without prior notice by a resolution passed by simple majority vote. If our board of directors has a vacancy, such vacancy may be filled on a temporary basis by a person designated by the remaining members of our board of directors until the next general meeting of shareholders, which will resolve on a permanent appointment. Any director shall be eligible for re-election indefinitely.
 
Within the limits provided for by applicable law and our articles of association, our board of directors may delegate to one or more directors or to any one or more persons, who need not be shareholders, acting alone or jointly, the daily management of Globant S.A. and the authority to represent us in connection with such daily management. Our board of directors may also grant special powers to any person(s) acting alone or jointly with others as agent of Globant S.A.
 
Our board of directors may establish one or more committees, including without limitation, an audit committee, a nominating and corporate governance committee, and a compensation committee, and for which it will, if one or more of such committees are set up, appoint members, determine the purpose, powers and authorities as well as the procedures and such other rules as may be applicable thereto. Our board of directors has established an audit committee, a compensation committee, and a nominating and corporate governance committee.

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On October 3, 2023, our board of directors established the position of lead independent director and adopted the Lead Independent Director Charter, which governs the lead independent director authority, responsibilities and duties. The charter provides that, in circumstances where the chairman of the board of directors is not independent, the members of the board of directors may resolve to appoint from among the independent directors a lead independent director.
 
No contract or other transaction between us and any other company or firm will be affected or invalidated by the fact that any one or more of our directors or officers is interested in, or is a director, associate, officer, agent, adviser or employee of such other company or firm. Any director or officer who serves as a director, officer or employee or otherwise of any company or firm with which we may contract or otherwise engage in business will not, by reason of such affiliation with such other company or firm only, be prevented from considering and voting or acting upon any matters with respect to such contract or other business.

 Any director who has, directly or indirectly, a conflicting interest in a transaction submitted for approval to our board of directors that conflicts with our interest, must inform our board of directors thereof and cause a record of his or her statement to be included in the minutes of the meeting. Such director may not take part in these deliberations and may not vote on the relevant transaction. At the next general meeting, before any resolution is put to a vote, a special report is to be made on any transactions in which any of the directors may have had an interest that conflicts with our interest.
 
No shareholding qualification for directors is required.
 
Any director and other officer, past and present, is entitled to indemnification from us to the fullest extent permitted by law against liability and all expenses reasonably incurred or paid by such director in connection with any claim, action, suit or proceeding in which he or she is involved as a party or otherwise by virtue of his/her being or having been a director. We may purchase and maintain insurance for any director or other officer against any such liability.
 
No indemnification will be provided against any liability to our directors or executive officers by reason of willful misconduct, bad faith, gross negligence or reckless disregard of the duties of a director or officer. No indemnification will be provided with respect to any matter as to which the director or officer may have been finally adjudicated to have acted in bad faith and not in our interest, and no indemnification will be provided in the event of a settlement (unless approved by a court or our board of directors).
 
Registrars and Registers for Our Common Shares
 
All of our common shares are in registered form only.
 
We keep a register of common shares at our registered office in Luxembourg. This register is available for inspection by any shareholder. In addition, we may appoint registrars in different jurisdictions who will each maintain a separate register for the registered common shares entered therein. It is possible for our shareholders to elect the entry of their common shares in one of these registers and the transfer thereof at any time from one register to any other, including to the register kept at our registered office. However, our board of directors may restrict such transfers for common shares that are registered, listed, quoted, dealt in or have been placed in certain jurisdictions in compliance with the requirements applicable therein.
 
Our articles of association provide that the ownership of registered common shares is established by inscription in the relevant register. We may consider the person in whose name the registered common shares are registered in the relevant register as the owner of such registered common shares.
 
Transfer Agent and Registrar
 
The transfer agent and registrar for our common shares is Equinity Trust Company LLC (formerly known as American Stock Transfer & Trust Company, LLC), with an address at 6201 15th Avenue Brooklyn, New York, NY 11219.
 
Our common shares are listed on the NYSE under the symbol "GLOB".








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C. Material Contracts

On May 31, 2023, Globant LLC, a U.S. subsidiary of the Company, entered into a Fourth Amended and Restated Credit Agreement, by and among certain financial institutions listed therein, as lenders, and HSBC Bank USA, N.A., as administrative agent, issuing bank and swingline lender (the “Fourth A&R Credit Agreement”). The Fourth A&R Credit Agreement amends and restates that certain Third Amendment and Restated Credit Agreement dated June 2, 2022. The Fourth A&R Credit Agreement increases the term loan commitment to $725 million and the revolving commitment to $350 million. The maturity date of each loan is May 30, 2028.

On May 25, 2021, we entered into an underwriting agreement with Goldman Sachs & Co. LLC and Citigroup Global Markets Inc., as representatives of the underwriters named therein, relating to the offer and sale of an aggregate of 1,380,000 of our common shares, including 180,000 common shares issued as a result of the underwriters' exercise in full of their overallotment option, at a public offering price of $214.00 per common share.

D. Exchange Controls
 
 
E. Taxation
 
The following is a summary of the material Luxembourg and U.S. federal income tax consequences to U.S. Holders (as defined below) of the ownership and disposition of our common shares. This summary is based upon Luxembourg tax laws and U.S. federal income tax laws (including the Code, final, temporary and proposed Treasury regulations, rulings, judicial decisions and administrative pronouncements), all currently in effect as of the date hereof and all of which are subject to change or changes in wording or administrative or judicial interpretation occurring after the date hereof, possibly with retroactive effect.
 
As used herein, the term "U.S. Holder" means a beneficial owner of one or more of our common shares:
 
(a)that is for U.S. federal income tax purposes one of the following:
(i)an individual citizen or resident of the United States,
(ii)a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any State thereof or the District of Columbia, or
(iii)an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source;
(b)who holds the common shares as capital assets for U.S. federal income tax purposes;
(c)who owns, directly, indirectly or by attribution, less than 10% of our share capital or voting shares; and
(d)whose holding is not effectively connected with a permanent establishment in Luxembourg.

This summary does not address all of the tax considerations that may apply to holders that are subject to special tax rules, such as U.S. expatriates, insurance companies, tax-exempt organizations, certain financial institutions, persons subject to the alternative minimum tax, dealers and certain traders in securities, persons holding common shares as part of a straddle, hedging, conversion or other integrated transaction, persons who acquired their common shares pursuant to the exercise of employee shares options or otherwise as compensation, partnerships or other entities classified as partnerships for U.S. federal income tax purposes or persons whose functional currency is not the U.S. dollar. Such holders may be subject to U.S. federal income tax consequences different from those set forth below. In addition, this summary does not address all of the Luxembourg tax considerations that may apply to holders that are subject to special tax rules.
 
If a partnership holds common shares, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. A partnership, or partner in a partnership, that holds common shares is urged to consult its own tax advisor regarding the specific tax consequences of owning and disposing of the common shares.
 
Potential investors in our common shares should consult their own tax advisors concerning the specific Luxembourg and U.S. federal, state and local tax consequences of the ownership and disposition of our common shares in light of their particular situations as well as any consequences arising under the laws of any other taxing jurisdiction.




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Luxembourg Tax Considerations

Introduction
 
The following is an overview of certain material Luxembourg tax consequences of purchasing, owning and disposing of the common shares issued by us. It does not purport to be a complete analysis of all possible tax situations that may be relevant to a decision to purchase, own or deposit our common shares. It is included herein solely for preliminary information purposes and is not intended to be, nor should it construed to be, legal or tax advice. Prospective purchasers of our common shares should consult their own tax advisers as to the applicable tax consequences of the ownership of our common shares, based on their particular circumstances. The following description of Luxembourg tax law is based upon the Luxembourg law and regulations as in effect and as interpreted by the Luxembourg tax authorities as of the date of this annual report and is subject to any amendments in law (or in interpretation) later introduced, whether or not on a retroactive basis. Please be aware that the residence concept used under the respective headings below applies for Luxembourg tax assessment purposes only. Any reference in this section to a tax, duty, levy impost or other charge or withholding of a similar nature refers to Luxembourg tax laws and/or concepts only. Also, please note that a reference to Luxembourg income tax encompasses corporate income tax (impôt sur le revenu des collectivités), municipal business tax (impôt commercial communal), a solidarity surcharge (contribution au fonds pour l'emploi) and personal income tax (impôt sur le revenu) generally. Corporate taxpayers may further be subject to net worth tax (impôt sur la fortune), as well as other duties, levies or taxes. Corporate income tax, municipal business tax, net worth tax, as well as the solidarity surcharge invariably applies to most corporate taxpayers resident of Luxembourg for tax purposes. Individual taxpayers are generally subject to personal income tax and to the solidarity surcharge. Under certain circumstances, where an individual taxpayer acts in the course of the management of a professional or business undertaking, municipal business tax may apply as well.

Taxation of the company

Income tax

As the company is a fully-taxable Luxembourg company, its net taxable profit is as a rule subject to corporate income tax ("CIT") and municipal business tax ("MBT") at ordinary rates in Luxembourg.
The taxable profit as determined for CIT purposes is applicable, with minor adjustments, for MBT purposes. CIT is levied at an effective maximum rate of 18.2% as from 2023 (inclusive of the 7% surcharge for the employment fund). MBT is levied at a variable rate according to the municipality in which the company is located (6.8% in the City of Luxembourg). The maximum aggregate CIT and MBT rate consequently amounts to 24.9% as from 2023 for companies located in the City of Luxembourg.
Dividends and other payments derived from shares by the company are subject to income taxes, unless the conditions of the participation exemption regime, as described below, are satisfied.
A tax credit is generally granted for withholding taxes levied at source within the limit of the tax payable in Luxembourg on such income, whereby any excess withholding tax is not refundable.
Under the participation exemption regime (subject to the relevant anti-abuse rules), dividends derived from shares may be exempt from income tax if (i) the distributing company is a qualified subsidiary ("Qualified Subsidiary") and (ii) at the time the dividend is put at the company's disposal, the company has held or commits itself to hold for an uninterrupted period of at least 12 months shares representing a direct participation in the share capital of the Qualified Subsidiary (i) of at least 10% or (ii) of an acquisition price of at least EUR 1.2 million. A Qualified Subsidiary means (a) a Luxembourg resident fully-taxable company limited by share capital (société de capitaux), (b) a company covered by Article 2 of the Council Directive 2011/96/EU of November 30, 2011 as amended (the "EU Parent-Subsidiary Directive") or (c) a non-resident company limited by share capital (société de capitaux) liable to a tax corresponding to Luxembourg CIT. Liquidation proceeds are assimilated to a received dividend and may be exempt under the same conditions. The exemption does not apply to income covered by the EU Parent-Subsidiary Directive, which is derived from a participation held directly in the capital of a company that is a resident of another EU Member State and covered by the EU Parent-Subsidiary Directive, to the extent that they are deductible in that EU Member State.

If the conditions of the participation exemption regime are not met, dividends derived by the company from subsidiaries may be exempt for 50% of their gross amount if they are received from (i) a Luxembourg resident fully-taxable company limited by share capital, or (ii) a company limited by share capital resident in a State with which the Grand Duchy of Luxembourg has concluded a double tax treaty and liable to a tax corresponding to Luxembourg CIT, or (iii) a company resident in a EU Member State and covered by Article 2 of the EU Parent-Subsidiary Directive.
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Capital gains realized by the company on shares are subject to CIT and MBT at ordinary rates, unless the conditions of the participation exemption regime, as described below, are satisfied. Under the participation exemption regime, capital gains realized on shares of a Qualified Subsidiary may be exempt from CIT and MBT at the level of the company if at the time the capital gain is realized, the company has held or commits itself to hold for an uninterrupted period of at least 12 months shares representing a direct participation in the share capital of the Qualified Subsidiary (i) of at least 10% or (ii) of an acquisition price of at least EUR 6 million. Taxable gains are defined as being the difference between the price for which shares have been disposed of and the lower of their cost or book value.
 
Withholding tax
 
Dividends paid by us to the holders of our common shares are as a rule subject to a 15% withholding tax in Luxembourg, unless a reduced withholding tax rate applies pursuant to an applicable double tax treaty or an exemption pursuant to the application of the participation exemption, and, to the extent withholding tax applies, we are responsible for withholding amounts corresponding to such taxation at its source.
If the company and a U.S. relevant holder are eligible for the benefits of the tax treaty concluded between the United State and Luxembourg (the "Treaty"), the rate of withholding on distributions is 15%, or 5% if the beneficial owner is a U.S. relevant holder and a qualified resident company as defined in Article 24 of the Treaty that owns at least 10% of the company's voting stock.
A withholding tax exemption may apply under the participation exemption (subject to the relevant anti-abuse rules) if cumulatively (i) the holder of our shares is an eligible parent (an "Eligible Parent") and (ii) at the time the income is made available, the holder of our shares has held or commits itself to hold for an uninterrupted period of at least 12 months a direct participation of at least 10% of our share capital or a direct participation of an acquisition price of at least EUR 1.2 million (or an equivalent amount in another currency). Holding a participation through an entity treated as tax transparent from a Luxembourg income tax perspective is deemed to be a direct participation in proportion to the net assets held in this entity. An Eligible Parent includes (a) a company covered by Article 2 of the EU Parent-Subsidiary Directive or a Luxembourg permanent establishment thereof, (b) a company resident in a State having a double tax treaty with Luxembourg and subject to a tax corresponding to Luxembourg CIT or a Luxembourg permanent establishment thereof, (c) a company limited by share capital (société de capitaux) or a cooperative society (société coopérative) resident in the European Economic Area other than an EU Member State and liable to a tax corresponding to Luxembourg CIT or a Luxembourg permanent establishment thereof or (d) a Swiss company limited by share capital (société de capitaux) which is effectively subject to corporate income tax in Switzerland without benefiting from an exemption.
No withholding tax is levied on capital gains and liquidation proceeds.
Net wealth tax
The company is as a rule subject to Luxembourg net wealth tax ("NWT") on its net assets as determined for net wealth tax purposes. NWT is levied at the rate of 0.5% on net assets not exceeding EUR 500 million and at the rate of 0.05% on the portion of the net assets exceeding EUR 500 million. Net worth is referred to as the unitary value (valeur unitaire), as determined at January 1 of each year. The unitary value is in principle calculated as the difference between (i) assets estimated at their fair market value (valeur estimée de réalisation), and (ii) liabilities vis-à-vis third parties.
Under the participation exemption regime, a qualified shareholding held by the company in a Qualified Subsidiary is exempt for net wealth tax purposes.
A minimum net wealth tax ("MNWT") is levied on companies having their statutory seat or central administration in Luxembourg. For entities for which the sum of fixed financial assets, receivables against related companies, transferable securities and cash at bank exceeds 90% of their total balance sheet and EUR 350,000, the MNWT is set at EUR 4,815. For all other companies having their statutory seat or central administration in Luxembourg which do not fall within the scope of the EUR 4,815 MNWT, the MNWT ranges from EUR 535 to EUR 32,100, depending on the company's total balance sheet.
This difference in treatment was recently analyzed by the Luxembourg Constitutional Court, that ruled on November 10, 2023 that such differentiation is not compatible with the constitutional principle of equality. Pending legislative reform, the taxpayers concerned will be subject to the MNWT of EUR 1,605 when their total balance sheet is between EUR 350,000 and EUR 2,000,000, instead of the fixed MNWT of EUR 4,815.
Other taxes
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The issuance of our common shares and any other amendment of our articles of association are currently subject to a EUR 75 fixed registration duty. The disposal of our common shares is not subject to a Luxembourg registration tax or stamp duty, unless recorded in a Luxembourg notarial deed or otherwise registered in Luxembourg.
Taxation of the holders of commons shares
Luxembourg tax residency of the holders of our common shares
A holder of our common shares will not become resident, nor be deemed to be resident, in Luxembourg by reason only of the holding and/or disposing of our common shares or the execution, performance or enforcement of his/her rights thereunder.
Income tax

Luxembourg resident holders 
Luxembourg individual residents 
Dividends and other payments derived from our common shares by resident individual holders of our common shares, who act in the course of the management of either their private wealth or their professional or business activity, are subject to income tax at the ordinary progressive rates. A tax credit may be granted, under certain circumstances, for Luxembourg withholding tax levied. 50% of the gross amount of dividends received from the company by resident individual holders of our common shares are exempt from income tax.

Capital gains realized on the disposal of our common shares by resident individual holders of our common shares, who act in the course of the management of their private wealth, are not subject to income tax, unless said capital gains qualify either as speculative gains or as gains on a substantial participation. Capital gains are deemed to be speculative and are subject to income tax at ordinary rates if our common shares are disposed of within six months after their acquisition or if their disposal precedes their acquisition. Speculative gains are subject to income tax as miscellaneous income at ordinary rates. A participation is deemed to be substantial where a resident individual holder of our common shares holds or has held, either alone or together with his spouse or partner and / or minor children, directly or indirectly at any time within the five years preceding the disposal, more than 10% of the share capital of the company whose common shares are being disposed of. A holder of our common shares is also deemed to alienate a substantial participation if he acquired free of charge, within the five years preceding the transfer, a participation that was constituting a substantial participation in the hands of the alienator (or the alienators in case of successive transfers free of charge within the same five-year period). Capital gains realized on a substantial participation more than six months after the acquisition thereof are taxed according to the half-global rate method, (i.e. the average rate applicable to the total income is calculated according to progressive income tax rates and half of the average rate is applied to the capital gains realized on the substantial participation). A disposal may include a sale, an exchange, a contribution or any other kind of alienation of the participation.
 
Capital gains realized on the disposal of our common shares by resident individual holders of our common shares, who act in the course of their professional or business activity, are subject to income tax at ordinary rates. Taxable gains are determined as being the difference between the price for which our common shares have been disposed of and the lower of their cost or book value.

Luxembourg fully-taxable corporate residents
 
Dividends and other payments derived from our common shares by Luxembourg-resident, fully-taxable companies are subject to CIT and MBT, unless the conditions of the participation exemption regime, as described below, are satisfied. A tax credit may, under certain circumstances, be granted for any Luxembourg withholding tax levied. If the conditions of the participation exemption regime are not met, 50% of the gross amount of dividends received by Luxembourg-resident, fully-taxable companies from our common shares are exempt from CIT and MBT.

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Under the participation exemption regime, dividends derived from our common shares may be exempt from CIT and MBT at the level of the holder of our common shares if cumulatively (i) the holder of our common shares is a Luxembourg-resident, fully-taxable company and (ii) at the time the dividend is put at the holder of our common shares' disposal, the holder of our common shares has held or commits itself to hold for an uninterrupted period of at least 12 months a qualified shareholding ("Qualified Shareholding"). A Qualified Shareholding means common shares representing a direct participation of at least 10% in the share capital of the company or a direct participation in the company of an acquisition price of at least EUR 1.2 million (or an equivalent amount in another currency). Liquidation proceeds are assimilated to a received dividend and may be exempt under the same conditions. Common shares held through a tax-transparent entity are considered as being a direct participation proportionally to the percentage held in the net assets of the transparent entity.
 
Capital gains realized by a Luxembourg-resident, fully-taxable company on our common shares are subject to CIT and MBT at ordinary rates, unless the conditions of the participation exemption regime, as described below, are satisfied. Under the participation exemption regime, capital gains realized on our common shares may be exempt from income tax at the level of the holder of our common shares if cumulatively (i) the holder of our common shares is a Luxembourg fully-taxable corporate resident and (ii) at the time the capital gain is realized, the holder of our common shares has held or commits itself to hold for an uninterrupted period of at least 12 months our common shares representing a direct participation in the share capital of the company of at least 10% or a direct participation in the company of an acquisition price of at least EUR 6 million (or an equivalent amount in another currency). Taxable gains are determined as being the difference between the price for which our common shares have been disposed of and the lower of their cost or book value.
  
Luxembourg residents benefiting from a special tax regime
 
Holders of our common shares who are either (i) an undertaking for collective investment governed by the amended law of December 17, 2010, (ii) a specialized investment fund governed by the amended law of February 13, 2007, (iii) a family wealth management company governed by the amended law of May 11, 2007 and (iv) a reserved alternative investment fund treated as a specialized investment fund for Luxembourg tax purposes governed by the amended law of July 23, 2016, are exempt from income tax in Luxembourg. Dividends derived from and capital gains realized on our common shares are thus not subject to income tax in their hands.
 
Luxembourg non-resident holders
 
Non-resident holders of our common shares who have neither a permanent establishment nor a permanent representative in Luxembourg to which or whom our common shares are attributable, are not liable to any Luxembourg income tax on income and gains derived from our common shares except capital gains realized on (i) a substantial participation before the acquisition or within the first six months of the acquisition thereof, or (ii) a substantial participation more than six months after the acquisition thereof by a holder of our common shares who has been a former Luxembourg resident for more than fifteen years and has become a non-resident, at the time of transfer, less than five years ago. A participation is deemed to be substantial where a shareholder holds or has held, either alone or, in case of an individual shareholder, together with his/her spouse or partner and/or minor children, directly or indirectly at any time within the five years preceding the disposal, more than 10% of the share capital of the company whose common shares are being disposed of. A shareholder is also deemed to alienate a substantial participation if he acquired free of charge, within the five years preceding the transfer, a participation that was constituting a substantial participation in the hands of the alienator (or the alienators in case of successive transfers free of charge within the same five-year period).
If the company and a U.S. relevant holder are eligible for the benefits of the Treaty, such U.S. relevant holder generally should not be subject to Luxembourg tax on the gain from the disposal of such common shares unless such gain is attributable to a permanent establishment or a permanent representative of such U.S. relevant holder in Luxembourg.
Non-resident holders of our common shares which have a permanent establishment or a permanent representative in Luxembourg to which or whom our common shares are attributable, must include any income received, as well as any gain realized, on the sale, disposal or redemption of our common shares, in their taxable income for Luxembourg tax assessment purposes, unless the conditions of the participation exemption regime, as described below, are satisfied. If the conditions of the participation exemption regime are not fulfilled, 50% of the gross amount of dividends received by a Luxembourg permanent establishment or permanent representative may be, however, exempt from income tax. Taxable gains are determined as being the difference between the price for which the common shares have been disposed of and the lower of their cost or book value.
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Under the participation exemption regime, dividends derived from our common shares may be exempt from income tax if cumulatively (i) our common shares are attributable to a qualified permanent establishment ("Qualified Permanent Establishment") and (ii) at the time the dividend is put at the disposal of the Qualified Permanent Establishment, it has held or commits itself to hold a Qualified Shareholding for an uninterrupted period of at least 12 months. A Qualified Permanent Establishment means (a) a Luxembourg permanent establishment of a company covered by Article 2 of the EU Parent-Subsidiary Directive, (b) a Luxembourg permanent establishment of a company limited by share capital (société de capitaux) resident in a State having a tax treaty with Luxembourg, and (c) a Luxembourg permanent establishment of a company limited by share capital (société de capitaux) or a cooperative society (société coopérative) resident in the European Economic Area other than a EU Member State. Liquidation proceeds are assimilated to a received dividend and may be exempt under the same conditions. Common shares held through a tax transparent entity are considered as being a direct participation proportionally to the percentage held in the net assets of the transparent entity.
Under the participation exemption regime, capital gains realized on our common shares may be exempt from income tax if (i) our common shares are attributable to a Qualified Permanent Establishment and (ii) at the time the capital gain is realized, the Qualified Permanent Establishment has held or commits itself to hold, for an uninterrupted period of at least 12 months, our common shares representing a direct participation in the share capital of the company of at least 10% or a direct participation in the company of an acquisition price of at least EUR 6 million (or an equivalent amount in another currency). Taxable gains are determined as being the difference between the price for which our common shares have been disposed of and the lower of their cost or book value.
 
Net Wealth Tax
 
Luxembourg resident holders of our common shares, as well as non-resident holders of our common shares who have a permanent establishment or a permanent representative in Luxembourg to which or whom our common shares are attributable, are subject to Luxembourg net wealth tax on our common shares, except if the holder is (i) a resident or non-resident individual taxpayer, (ii) a securitization company governed by the amended law of March 22, 2004 on securitization, (iii) a company governed by the amended law of June 15, 2004 on venture capital vehicles, (iv) a professional pension institution governed by the amended law of July 13, 2005, (v) a specialized investment fund governed by the amended law of February 13, 2007, (vi) a family wealth management company governed by the amended law of May 11, 2007, (vii) an undertaking for collective investment governed by the amended law of December 17, 2010 or (viii) a reserved alternative investment fund governed by the amended law of July 23, 2016. However, (i) a securitization company governed by the amended law of March 22, 2004 on securitization, (ii) a company governed by the amended law of June 15, 2004 on venture capital vehicles, (iii) a professional pension institution governed by the amended law of July 13, 2005 and (iv) a reserved alternative investment fund treated as a venture capital vehicle for Luxembourg tax purposes and governed by the amended law of July 23, 2016, remain subject to MNWT.
Under the participation exemption, a Qualified Shareholding held in the company by an Eligible Parent or attributable to a Qualified Permanent Establishment may be exempt. The net wealth tax exemption for a Qualified Shareholding does not require the completion of the 12-month holding period.
 
Other Taxes
 
Under Luxembourg tax law, where an individual holder of our common shares is a resident of Luxembourg for tax purposes at the time of his or her death, our common shares are included in his or her taxable basis for inheritance tax purposes. On the contrary, no inheritance tax is levied on the transfer of our common shares upon the death of an individual holder in cases where the deceased was not a resident of Luxembourg for inheritance purposes.
Gift tax may be due on a gift or donation of our common shares, if the gift is recorded in a Luxembourg notarial deed or otherwise registered in Luxembourg.










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U.S. Federal Income Tax Considerations
 
Taxation of dividends
 
Distributions received by a U.S. Holder on common shares, including the amount of any Luxembourg taxes withheld, other than certain pro rata distributions of common shares to all shareholders, will constitute foreign source dividend income to the extent paid out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Because we do not maintain calculations of our earnings and profits under U.S. federal income tax principles, it is expected that such distributions (including any Luxembourg taxes withheld) will be reported to U.S. Holders as dividends. Although it is our intention, if we pay any dividends, to pay such dividends in U.S. dollars, if dividends are paid in euros, the amount of the dividend a U.S. Holder will be required to include in income will equal the U.S. dollar value of the euro, calculated by reference to the exchange rate in effect on the date the payment is received by the U.S. Holder, regardless of whether the payment is converted into U.S. dollars on the date of receipt. If the dividend is converted to U.S. dollars on the date of receipt, a U.S. holder should not be required to recognize foreign currency gain or loss in respect of the dividend income. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of its receipt. If a U.S. Holder realizes gain or loss on a sale or other disposition of euro, it will be U.S. source ordinary income or loss. U.S. Holders that are corporations generally will not be entitled to claim a dividends received deduction with respect to any distributions they receive from us, except that certain holders of our common shares that are corporations and that directly, indirectly or constructively own 10% or more of our voting power or value may be entitled to a 100% dividends received deduction under certain circumstances. The rules with respect to the dividends received deduction are complex and involve the application of rules that depend on a U.S. Holder’s particular circumstances and on whether we are a PFIC, a “controlled foreign corporation” or both, among other things. You should consult your own tax advisor to determine the effect of the dividends received deduction on your ownership of our common stock. Subject to applicable limitations, dividends received by certain non-corporate U.S. Holders of common shares generally will be taxable at the reduced rate that otherwise applies to long-term capital gains. Non-corporate U.S. Holders should consult their own tax advisors to determine whether they are subject to any special rules that limit their ability to be taxed at this favorable rate. Certain pro rata distributions of ordinary shares to all shareholders are not generally subject to U.S. federal income tax.
 
Instead of claiming a credit, a U.S. Holder may elect to deduct foreign taxes (including any Luxembourg taxes) in computing its taxable income, subject to generally applicable limitations. An election to deduct foreign taxes (instead of claiming foreign tax credits) applies to all taxes paid or accrued in the taxable year to foreign countries and possessions of the United States. The limitations on foreign taxes eligible for credit are calculated separately with respect to specific classes of income. The rules governing foreign tax credits are complex. Therefore, U.S. Holders should consult their own tax advisors regarding the availability of foreign tax credits in their particular circumstances.
 
Taxation upon sale or other taxable disposition of common shares
 
A U.S. Holder will recognize U.S. source capital gain or loss on the sale or other disposition of common shares, which will be long-term capital gain or loss if the U.S. Holder has held such common shares for more than one year. The amount of the U.S. Holder's gain or loss will be equal to the difference between such U.S. Holder's tax basis in the common shares sold or otherwise disposed of and the amount realized on the sale or other disposition.

Controlled Foreign Corporation

The Tax Cuts and Jobs Act of 2017 (the "2017 Tax Act") eliminated the prohibition on “downward attribution” from non-U.S. persons to U.S. persons under Section 958(b)(4) of the Code for purposes of determining constructive stock ownership under the controlled foreign corporation (“CFC”) rules. As a result, our U.S. subsidiary will be deemed to own all of the stock of our non-U.S. subsidiaries held by the Company for CFC purposes. To the extent a non-U.S. subsidiary is treated as a CFC for any taxable year, each U.S. person treated as a “10% U.S. Shareholder” with respect to such CFC that held our common shares directly or indirectly through non-U.S. entities (including the Company) as of the last day in such taxable year that the subsidiary was a CFC would generally be required to include in gross income as ordinary income its pro rata share of certain income of the CFC, regardless of whether that income was actually distributed to such U.S. person. For tax years beginning on or after January 1, 2018, a “10% U.S. Shareholder” of a non-U.S. corporation includes any U.S. person that owns (or is treated as owning) stock of the non-U.S. corporation possessing 10% or more of the total voting power or total value of such non-U.S. corporation’s stock. The legislative history under the 2017 Tax Act indicates that this change was not intended to cause our non-U.S. subsidiaries to be treated as CFCs with respect to a 10% U.S. Shareholder that is not related to our U.S. subsidiary. However, it is not clear whether the IRS or a court would interpret the change made by the 2017 Tax Act in a manner consistent with such indicated intent. Treasury and the IRS, in issued guidance, however, have declined to provide relief to unrelated “10% U.S. Shareholders” of foreign-controlled CFCs.

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Thus, investors are strongly urged to consult their own tax advisors to determine whether their ownership of our common shares will cause them to become a 10% U.S. Shareholder and the impact of such a classification.

Passive foreign investment company rules
 
We believe that we will not be a PFIC for U.S. federal income tax purposes for this current taxable year and do not expect to become one in the foreseeable future. However, because PFIC status depends upon the composition of our income and assets and the market value of the assets (including, among others, less than 25% owned equity investments) from time to time, there can be no assurance that we will not be considered a PFIC for any taxable year. Because we have valued our goodwill based on the market value of our equity, a decrease in the price of common shares may also result in us becoming a PFIC. The composition of our income and our assets will also be affected by how, and how quickly, we spend our cash. Under circumstances where the cash is not deployed for active purposes, our risk of becoming a PFIC may increase. If we were treated as a PFIC for any taxable year during which a U.S. Holder held common shares, certain adverse tax consequences could apply to the U.S. Holder.
 
If we were treated as a PFIC for any taxable year during which a U.S. Holder held common shares, gain recognized by a U.S. Holder on a sale or other disposition of common shares would be allocated ratably over the U.S. Holder's holding period for the common shares. The amounts allocated to the taxable year of the sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, and an interest charge would be imposed on the resulting tax liability. The same treatment would apply to any distribution in respect of common shares to the extent it exceeds 125% of the average of the annual distributions on common shares received by the U.S. Holder during the preceding three years or the U.S. Holder's holding period, whichever is shorter. Certain elections may be available that would result in alternative treatments (such as mark-to-market treatment) of the common shares.
 
In addition, if we were treated as a PFIC in a taxable year in which we pay a dividend or in the prior taxable year, the reduced rate discussed above with respect to dividends paid to certain non-corporate U.S. Holders would not apply.
 
Information reporting and backup withholding
 
Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting and to backup withholding unless the U.S. Holder is a corporation or other exempt recipient or, in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder's U.S. federal income tax liability and may entitle such U.S. Holder to a refund, provided that the required information is timely furnished to the Internal Revenue Service.
 
F. Dividends and Paying Agents
 
Not applicable.
 
G. Statement by Experts.
 
Not applicable.
 
H. Documents on Display
 
As a foreign private issuer, we are subject to periodic reporting and other informational requirements of the Exchange Act as applicable. Accordingly, we are required to file reports, including this annual report on Form 20-F, and other information with the SEC. Specifically, we are required to file annually a Form 20-F within four months after the end of each fiscal year, and are not required to disclose certain detailed information regarding executive compensation that is required from United States domestic issuers. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently as companies that are not foreign private issuers whose securities are registered under the Exchange Act. Also, as a foreign private issuer, we are exempt from the rules of the Exchange Act that require the furnishing of proxy statements to shareholders, and our senior management, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
 
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As a foreign private issuer, we are also exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors. We are, however, still subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5. Since many of the disclosure obligations required of us as a foreign private issuer are different than those required by other United States domestic reporting companies, our shareholders, potential shareholders and the investing public in general should not expect to receive information about us in the same amount, and at the same time, as information is received from, or provided by, other United States domestic reporting companies. We are liable for violations of the rules and regulations of the SEC which do apply to us as a foreign private issuer.
 
Our SEC filings are available to you on the SEC's website at http://www.sec.gov.
 
I. Subsidiaries Information
 
Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 
Our consolidated financial statements are prepared in conformity with IFRS Accounting Standards, as issued by the IASB. We are exposed to a variety of risks in the ordinary course of our business, including, but not limited to, credit risk, liquidity risk and interest rate risk. We regularly assess each of these risks to minimize any adverse effects on our business as a result of those factors. For discussion and sensitivity analyses of our exposure to these risks, see note 29 to our consolidated financial statements included elsewhere herein.  

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.
 
A. Debt Securities
 
Not applicable.

B. Warrants and Rights
 
Not applicable.
 
C. Other Securities
 
Not applicable.
 
D. American Depositary Shares
 
Not applicable.
 
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PART II.

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.
 
Not applicable.
 
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.
 
Not applicable.
 
ITEM 15. CONTROLS AND PROCEDURES.
 
a) Disclosure Controls and Procedures
 
As of December 31, 2023, our management, with the participation of the Chief Executive Officer and Chief Financial Officer, conducted an evaluation pursuant to Rule 13a-15 promulgated under the Securities Exchange Act of 1934, of the effectiveness of our disclosure controls and procedures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. 
 
Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that Company's disclosure controls and procedures were effective as of December 31, 2023.
 
b) Management's Annual Report on Internal Control over Financial Reporting
 
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and Chief Financial Officer that: (i) pertains to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets; (ii) provides reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorization of our management and directors; and (iii) provides reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedure may deteriorate. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, our management used the criteria established in "Internal Control — Integrated Framework (2013)" issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). As a result of this assessment, our management has determined that our internal control over financial reporting was effective as of December 31, 2023.

Our management has excluded ExperienceIT LLC, Python Bidco S.A.S. (referred to as “Pentalog”), GUT Agency Ltd and Iteris Holding Ltda., from its assessment of internal control over financial reporting as of December 31, 2023 because they were acquired by the Company in purchase business combinations during 2023. In aggregate, the entities incorporated as business combinations constitute 3.9% of our consolidated assets and 4.2% of consolidated revenues as of and for the year ended December 31, 2023.
 
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 has been audited by Price Waterhouse & Co. S.R.L., an independent registered public accounting firm, as stated in their report which appears herein.

c) Attestation Report of the Registered Public Accounting Firm
 
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 has been audited by Price Waterhouse & Co. S.R.L., an independent registered public accounting firm, as stated in their report which appears herein.
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d) Changes in internal control over financial reporting
 
There were no changes in our internal controls over financial reporting as defined in Rule 13a-15(d), under the Securities Exchange Act of 1934, as amended, that occurred during the period covered by this annual report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
ITEM 16. [Reserved]
 
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.
 
See “Directors, Senior Management and Employees—Board Practices—Board Committees—Audit Committee.” Our Board of Directors has determined that Maria Pinelli qualifies as an “audit committee financial expert” under applicable SEC rules.
 
ITEM 16B. CODE OF ETHICS.
 
Effective as of July 23, 2014, we adopted a code of business conduct and ethics which sets the guidelines and principles necessary for promoting and assuring good behavior within the organization. On January 26, 2022, our board of directors approved and adopted the 2022 Code of Ethics, which became effective on March 1, 2022. The new code introduces new important topics, including, among others, anti-money laundering provisions, protection of Globant's image and proper use of social media, third party's audits and government investigations and matters of integration and diversity. A copy of that code is available on our website at investors.globant.com/code-of-ethics. Any amendments to such code will be disclosed on our website.
 
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
 
The following table provides information on the aggregate fees for the services provided by our auditor, Price Waterhouse & Co. S.R.L. for the years 2023 and 2022, classified by type of service rendered for the periods indicated, in thousands of dollars:
 20232022
 ($ in thousands)
Audit Fees (1)
$1,708 $1,569 
Audit Related Fees (2)
84 53 
Tax Fees (3)
  
All Other Fees (4)
  
Total1,792 1,622 
 
(1)"Audit Fees" includes fees for professional services rendered by the principal accountant in connection with the audit of the annual financial statements, certain procedures regarding our quarterly financial results, revisions of purchase price allocations related to acquisitions and services in connection with statutory and regulatory filings.
(2)“Audit Related Fees” includes fees for professional services rendered by the principal accountant and not included under the prior category. These services include, among others, fees relating to the issuance of limited assurance and other review reports in connection with our offering of securities.
(3)"Tax Fees" includes fees for professional services rendered by the principal accountant for tax compliance, advice and planning.
(4)"All Other Fees" includes fees for products and services provided by the principal accountant, other than Audit Fees and Audit-Related Fees.

Audit Committee Approval Policies and Procedure
 
In accordance with the audit committee's charter, all fees and retention terms relating to audit and non-audit services performed by our independent auditors must be pre-approved by the audit committee. The audit committee makes annual recommendations to the general meeting of shareholders of the company regarding the appointment, replacement, base compensation, evaluation and oversight of the work of the independent auditors to be retained to audit the annual financial statements of the company and review the quarterly financial statements of the company.
 
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The audit committee oversees the relationship with the independent auditors, including discussing with the auditors the planning and staffing of the audit and the nature and rigor of the audit process, receiving and reviewing audit reports, reviewing with the auditors any problems or difficulties the auditors may have encountered in carrying out their responsibilities and any board of directors’ letters provided by the auditors and the company’s response to such letters, and providing the auditors full access to the audit committee and the board of directors to report on all appropriate matters. 
The audit committee provides oversight of the company’s auditing, accounting and financial reporting principles, policies, controls, procedures and practices, and reviews significant changes to the foregoing as suggested by the independent auditors, internal auditors or the board of directors.
 
The audit committee approved all of the services described above and determined that the provision of such services is compatible with maintaining the independence of Price Waterhouse & Co. S.R.L.
 
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.
 
Not applicable.
 
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.
 
On May 31, 2019, our shareholders at the annual general meeting, according to the conditions set forth in article 430-15 of Luxembourg Companies Law, granted our board of directors the authorization to repurchase up to a maximum number of shares representing 20% of the share capital for a net purchase price that is (i) no less than 50% of the lowest common share price and (ii) no more than 50% above the highest common share price, in each case, such common share price being the closing price, as reported by the New York City edition of the Wall Street Journal, or, if not reported therein, any other authoritative sources to be selected by our board of directors, over the ten trading days preceding the date of the purchase (or, as the case may be, the date of the commitment to the transaction). The authorization is valid for a period ending five years from the date of the 2019 general meeting (i.e., May 31, 2024) unless renewed by the decision of a general meeting of shareholders of the Company. Pursuant to such authorization, our board of directors is authorized to acquire and sell our common shares under the conditions set forth in the minutes of such general meeting of shareholders. Such purchases and sales may be carried out for any purpose authorized by the general meeting of shareholders of Globant S.A.

On June 13, 2022, we entered into a 10b5-1 repurchase plan (the “2022 10b5-1 Plan”) with HSBC Securities (USA) Inc., acting as agent for the Company, for the repurchase of an aggregate of up to 50,000 common shares. The 2022 10b5-1 Plan expired on March 8, 2024. As of December 31, 2022, 37,500 common shares were purchased by the Company under the 2022 10b5-1 Plan.

On May 29, 2023, we entered into a 10b5-1 repurchase plan (the "2023 10b5-1 Plan", and together with the 2022 10b5-1 Plan, the "10b5-1 Plans") with HSBC Securities (USA) Inc., acting as agent for the Company, for the repurchase of an aggregate of up to 60,000 common shares in four windows, starting on July 18th, 2023 and ending on March 5th, 2024. The 2023 10b5-1 Plan will expire on March 8, 2024.

The following table reports purchases of Globant common shares by the Company during the year ended December 31, 2023 that were made under the 10b5-1 Plans.

109


PeriodTotal Number of Shares PurchasedAverage Price Paid per Share ($)Total Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsMaximum Number of Shares that May Yet Be Purchased under the Plans or Programs
January 1 to January 31, 2023— — — 72,500 
February 1 to February 28, 2023— — — 72,500 
March 1 to March 31, 2023(1)
12,500 169.3312,500 60,000 
April 1 to April 30, 2023— — — 60,000 
May 1 to May 31, 2023— — — 60,000 
June 1 to June 30, 2023— — — 60,000 
July 1 to July 31, 2023 (2)
15,000 197.9315,000 45,000 
August 1 to August 31, 2023 (3)
15,000 181.6015,000 30,000 
September 1 to September 30, 2023— — — 30,000 
October 1 to October 31, 2023— — — 30,000 
November 1 to November 30, 2023— — — 30,000 
December 1 to December 31, 2023— — — 30,000 
Total42,500 183.7542,500 30,000

(1)    On March 7, 2023, the Company repurchased 12,500 of its common shares under the 2022 10b5-1 Plan. These shares are held in treasury in order to facilitate the fulfillment of the deliveries under the ESPP and other releases under the 2014 Equity Incentive Plan.
(2)    On July 18, 2023, the Company repurchased 15,000 of its common shares under the 2023 10b5-1 Plan. These shares are held in treasury in order to facilitate the fulfillment of the deliveries under the ESPP and other releases under the 2014 Equity Incentive Plan.
(3)    On August 22, 2023, the Company repurchased 15,000 of its common shares under the 2023 10b5-1 Plan. These shares are held in treasury in order to facilitate the fulfillment of the deliveries under the ESPP and other releases under the 2014 Equity Incentive Plan.
 
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.
 
Not applicable. 

ITEM 16G. CORPORATE GOVERNANCE.
 
Corporate Governance Practices
 
Our corporate governance practices are governed by Luxembourg law (particularly the law of August 10th, 1915 on commercial companies as amended) and our articles of association.

As a Luxembourg company listed on the NYSE, we are not required to comply with all of the corporate governance listing standards of the NYSE for U.S. listed companies. However, we believe that our corporate governance practices meet, in all material respects, the corporate governance standards that are generally required by the NYSE for U.S. listed companies. Below is a summary of the significant ways that our corporate governance practices differ from the corporate governance standards required for listed U.S. companies by the NYSE (although our corporate governance practices may differ in non-material ways from the standards required by the NYSE that are not detailed in this document).

Majority of Independent Directors
 
Under NYSE standards, U.S. listed companies must have a majority of independent directors. There is no legal requirement under Luxembourg law to have a majority of independent directors on the board of directors.

 
110


Non-management Directors’ Meetings
 
Under NYSE standards, non-management directors must meet at regularly scheduled executive sessions without management present and, if such group includes directors who are not independent, an executive session including only independent directors should be held at least once per year. Luxembourg law does not require holding such meetings. For additional information, see “Directors, Senior Management and Employees - Directors and Senior Management.”
 
Audit Committee
 
Under NYSE standards, listed U.S. companies are required to have an audit committee composed of independent directors that satisfies the requirements of Rule 10A-3 promulgated under the Exchange Act of 1934. Luxembourg law also provides for an audit committee and related rules. Our articles of association provide that the board of directors may establish an audit committee. The board of directors has established an audit committee and has appointed Mses. Pinelli and Rottenberg and Mr. Odeen, with Mr. Odeen serving as the chairman of our audit committee and Ms. Pinelli serving as the audit committee financial expert (as currently defined under applicable SEC rules). Each of Mses. Pinelli and Rottenberg and Mr. Odeen satisfies the “independence” requirements within the meaning of Section 303A of the corporate governance rules of the NYSE as well as under Rule 10A-3 under the Exchange Act. For additional information, see “Directors, Senior Management and Employees — Board Practices”.
 
Under NYSE standards, all audit committee members of listed U.S. companies are required to be financially literate or must acquire such financial knowledge within a reasonable period and at least one of its members must have experience in accounting or financial administration. In addition, if a member of the audit committee simultaneously serves on the audit committees of more than three public companies, then the board must determine whether the simultaneous service would impair the ability of such member to effectively serve on the listed company’s audit committee, and must publicly disclose its determination. Under Luxembourg law, at least one member of the audit committee must be financially literate and the committee members as a whole must have competence relevant to the sector in which the company is operating.

Standards for Evaluating Director Independence  

Under NYSE standards, the board is required, on a case by case basis, to express an opinion with regard to the independence or lack of independence of each individual director. Neither Luxembourg law nor our articles of association require the board to express such an opinion.
 
Audit Committee Responsibilities
 
The NYSE requires certain matters to be set forth in the audit committee charter of U.S. listed companies. Our audit committee charter provides for many of the responsibilities that are expected from such bodies under the NYSE standard; however, the charter does not contain all such responsibilities, including provisions related to setting hiring policies for employees or former employees of independent auditors.

Corporate Governance and Nominating Committee
 
The NYSE requires that a listed U.S. company has a corporate governance and nominating committee of independent directors and a committee charter specifying the purpose, duties and evaluation procedures of the committee.
 
Concurrently with the appointment of Ms. Linda Rottenberg as lead independent director and a member of the audit committee, Ms. Rottenberg resigned as member of the corporate governance and nominating committee. Her vacancy in the corporate governance and nominating committee will be filed as soon as possible after our next annual general meeting. The current members of our corporate governance and nominating committee are Mr. Álvarez-Demalde and Ms. Mayumi Petroni Merhy, with Mr. Alvarez Demalde serving as chairman. Each of Mr. Álvarez-Demalde and Ms. Mayumi Petroni Merhy satisfies the “independence” requirements within the meaning of Section 303A of the corporate governance rules of the NYSE. For additional information, see “Directors, Senior Management and Employees — Board Practices”.
 
Compensation Committee
 
The NYSE requires that a listed U.S. company have a compensation committee of independent directors and a committee charter specifying the purpose, duties and evaluation procedures of the committee.
 
111


Mr. Richard Haythornthwaite resigned as a director of the Company and member of the compensation committee effective as of September 30, 2023. Mr. Haythornthwaite vacancy in the compensation committee will be filled as soon as a new director is appointed to fill Mr. Haythornthwaite vacancy in the board of directors. The current members of our compensation committee are Messrs. Odeen and Álvarez-Demalde, with Mr. Odeen serving as chairman. Each of Messrs. Odeen and Álvarez-Demalde satisfies the “independence” requirements within the meaning of Section 303A of the corporate governance rules of the NYSE. For additional information, see “Directors, Senior Management and Employees—Board Practices”.
 
Shareholder Voting on Equity Compensation Plans
 
Under NYSE standards, shareholders of U.S. listed companies must be given the opportunity to vote on equity compensation plans and material revisions thereto, except for employment inducement awards, certain grants, plans and amendments in the context of mergers and acquisitions, and certain specific types of plans. Neither Luxembourg Companies Law nor our articles of incorporation require shareholder approval of equity based compensation plans. Luxembourg law only requires approval of the board of directors for the adoption of equity based compensation plans.

Code of Business Conduct and Ethics

Under NYSE standards, listed companies must adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers. Effective as of July 23, 2014, we adopted a code of business conduct and ethics applicable to our principal executive, financial and accounting officers and all persons performing similar functions. On January 26, 2022, our board of directors approved and adopted the 2022 Code of Ethics, which became effective on March 1, 2022. The 2022 Code of Ethics introduced new important topics, including, but not limited to, anti-money laundering provisions, protection of Globant's image and proper use of social media, third party's audits and government investigations and matters of integration and diversity. A copy of that code, as amended, is available on our website at www.globant.com.

Chief Executive Officer Certification
 
A chief executive officer of a U.S. company listed on NYSE must annually certify that he or she is not aware of any violation by the company of NYSE corporate governance standards. In accordance with NYSE rules applicable to foreign private issuers, our chief executive officer is not required to provide NYSE with this annual compliance certification. However, in accordance with NYSE rules applicable to all listed companies, our chief executive officer must promptly notify NYSE in writing after any of our executive officers becomes aware of any noncompliance with any applicable provision of NYSE's corporate governance standards. In addition, we must submit an executed written affirmation and an interim written affirmation annually to the NYSE each time a change occurs to the board or the audit committee.
 
ITEM 16H. MINE SAFETY DISCLOSURE.
 
Not applicable.

ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
 
Not applicable.

ITEM 16J. INSIDER TRADING POLICIES

Not applicable.

ITEM 16K. CYBERSECURITY

Risk Management and Strategy

We recognize the importance of assessing, identifying and managing material risks associated with cybersecurity threats, as such term is defined in Item 16K of Form 20-F. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy and security laws.
112


Identifying and assessing cybersecurity risk is integrated into our overall risk management systems and processes. Cybersecurity risks related to our business, technical operations, privacy and compliance issues are identified and addressed through a multi-faceted approach, including third party assessments, IT security, governance, risk and compliance reviews. To defend, detect and respond to cybersecurity incidents, we, among other things: conduct proactive privacy and cybersecurity assessments of systems, network and applications, audit applicable data policies, manage intrusion detection and prevention systems and network access controls, perform penetration testing using external third-party tools and techniques to test security controls, focus on securing our applications and software, conduct employee training, implement secure coding practices, monitor emerging laws and regulations related to data protection and information security (including our consumer products) and implement appropriate changes. Teams of dedicated privacy, safety and security professionals oversee cybersecurity risk management and mitigation, incident prevention, detection and remediation. These teams include Globant Information Security Team (“GIST”) and Application & Infrastructure Security and Incident Response Team (the “Incident Response Team”).

As part of our cybersecurity risk management system, GIST tracks and logs privacy and security incidents across Globant, our vendors, and other third-party service providers to remediate and resolve any such incidents. Such incidents are assigned a severity score and classified as a “Cyber Security Incident” if the incident jeopardizes the confidentiality, integrity or availability of our information systems or any information residing therein. Significant incidents are reviewed regularly by the Incident Response Team to determine whether further escalation is appropriate. The Incident Response Team will also develop a remediation plan, perform forensic analyses and track incident metrics to improve the situation.

Any incident assessed as potentially being or potentially becoming material is automatically escalated for further assessment to the members of our Disclosure Committee, which is comprised of our chief financial officer, chief accounting officer, general counsel, head of internal audit and SOX compliance, head of investors relations division and compliance manager. In addition, we consult with outside counsel as appropriate, including on materiality analyses and disclosure matters. Our senior management apprises Globant’s independent public accounting firm of matters and any relevant developments.

The foregoing processes have been incorporated into Globant’s internal control matrix to, among others, (a) secure effective control over disclosure relating to cybersecurity matters, (b) include proper proceedings to review, record and classify cybersecurity incidents, and (c) ensure adequate Board oversight.

While we have experienced cybersecurity incidents in the past, as of the date of this annual report, we have not suffered any cybersecurity incident determined to have had material effects on our business strategy, operational results, or financial situation. However, any significant disruption to our service or access to our systems could result in a loss of customers and adversely affect our business and results of operation. Further, a penetration of our systems or a third-party’s systems or other misappropriation or misuse of personal information could subject us to business, regulatory, litigation and reputation risk, which could have a negative effect on our business, financial condition and results of operations. For further information on whether and how risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition, see “Risk Factors -If our computer systems or data, or our service providers’ systems or data, are subject to security incidents or breaches, or if any of our employees misuses or misappropriates data, it may disrupt our operations, and we may face reputational damage, lose clients and revenues, or incur losses.

Governance

Our Audit Committee has oversight responsibility for risks and incidents relating to cybersecurity threats, including compliance with disclosure requirements, cooperation with law enforcement, and related effects on financial and internal control risks, and it reports any findings and recommendations, as appropriate, to the full Board for consideration. In that capacity, our Audit Committee conducts periodic reviews of, and holds meetings with senior management to discuss, technology and cybersecurity risks and the risk assessment and risk management policies, practices, programs and/or procedures that we have adopted to monitor, control, mitigate and manage such risks.

Each quarter, the Incident Response Team prepares a report on cybersecurity incidents, risks, mitigation actions and strategy (the “Cybersecurity Report”). The Cybersecurity Report is presented by our chief information officer to our Audit Committee on a quarterly basis and to the Board on a semiannual basis. The full Board also receives periodic reports from the Chief Information Officer and the Audit Committee relating to the Company’s cybersecurity.

Since 2013, Globant certified ISO 27001, a standard that provides a model for establishing, implementing, operating, monitoring, reviewing, maintaining, and improving an information security management system (ISMS). The process of certifying ISO 27001 ensures that ISMS is under explicit management control. In 2016, we migrated successfully to the ISO 27001:2013.

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Our chief information officer has over 20 years of industry experience, including leading CloudOps and cybersecurity services and serving as CloudOps & Cybersecurity Studio Partner at Globant. Further, our security officer manager has more than 20 years of experience working in cybersecurity and infrastructure, specializing in military frameworks for cyber threat intelligence and cyber war, and currently leads our Offensive and Defensive security teams. Team members who support our information security program have relevant educational and industry experience, including holding similar positions at large technology companies.
114


PART III.
 
ITEM 17. FINANCIAL STATEMENTS.
 
We have elected to provide financial statements pursuant to Item 18.
 
ITEM 18. FINANCIAL STATEMENTS.
 
Our Consolidated Financial Statements are included at the end of this annual report.
 
ITEM 19. EXHIBITS.
 
The following exhibits are filed or incorporated by reference as part of this annual report: 
Exhibit
No.
 Description
1.1 
2.1 
4.1 
4.2
4.3
4.4
4.5
4.6 
4.7 
4.8
4.9
4.10 
4.11
4.12
4.13
4.14
115


4.15*
4.16*
4.17
4.18
8.1 
12.1 
12.2 
13.1 
13.2 
15.1
97.1
101.INSXBRL Instance Document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
 
*    Portions of this document (indicated by “[***]”) have been omitted because they are both not material and are the type that Globant S.A. treats as private and confidential.
116


SIGNATURE
 
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
 
Date: February 29, 2024
 
 GLOBANT S.A.
 By:/s/ Juan Ignacio Urthiague
 Name:Juan Ignacio Urthiague
 Title:Chief Financial Officer
 

117


GLOBANT S.A.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
 


 
F-1





Globant S.A.
Consolidated Financial Statements as of December 31, 2023 and December 31, 2022 and for each of the three years in the period ended December 31, 2023


F-2





Globant Image 2.jpg
Page 1 of 3





Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Globant S.A.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial position of Globant S.A. and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under item 15. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
F-3



As described in Management’s Annual Report on Internal Control over Financial Reporting, management has excluded Experience IT LLC, Python Bidco S.A.S. (referred to as “Pentalog”), GUT Agency Ltd and Iteris Holding Ltda. from its assessment of internal control over financial reporting as of December 31, 2023 because they were acquired by the Company in purchase business combinations during 2023. We have also excluded Experience IT LLC, Pentalog, GUT Agency Ltd and Iteris Holding Ltda. from our audit of internal control over financial reporting. Experience IT LLC, Pentalog, GUT Agency Ltd and Iteris Holding Ltda. are consolidated subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting collectively represent approximately 3.9% and 4.2%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2023.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Acquisition of Pentalog – Valuation of Customer Relationships

As described in Notes 4 and 26 to the consolidated financial statements, on July 20, 2023, the Company completed the acquisition of Pentalog for net consideration of $182.0 million. Of the acquired intangible assets, $22.4 million of customer relationships were recorded. Fair value is estimated by management using a multi-period excess earnings method for customer relationships. Management’s cash flow projections for the intangible assets acquired included significant judgments and assumptions relating to revenue growth rates, customer attrition rates, and discount rates for customer relationships.

The principal considerations for our determination that performing procedures relating to the valuation of customer relationships acquired in the acquisition of Pentalog is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the customer relationships; (ii) a high degree of auditor judgment subjectivity, and effort performing procedures and evaluating management’s significant assumptions related to revenue growth rates, customer attrition rates and discount rates for customer relationships; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

F-4


Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the customer relationships. These procedures also included, among others, (i) reading the purchase agreement; (ii) testing management’s process for developing the fair value estimate of the customer relationships; and (iii) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, customer attrition rates and discount rates for customer relationships. Evaluating management’s assumptions related to revenue growth rates for customer relationships involved considering (i) the current and past performance of the Pentalog businesses; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness multi-period excess earnings and (ii) the reasonableness of the discount rate assumption for customer relationships.


/s/ PRICE WATERHOUSE & CO. S.R.L.


/s/ Reinaldo Sergio Cravero (Partner)
Autonomous City of Buenos Aires, Argentina
February 29, 2024


We have served as the Company’s auditor since 2020.

F-5

GLOBANT S.A.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(in thousands of U.S. dollars, except per share amounts)

  For the year ended December 31,
 Notes202320222021
Revenues 52,095,939 1,780,243 1,297,078 
Cost of revenues 6.1(1,340,178)(1,110,848)(802,090)
Gross profit755,761 669,395 494,988 
Selling, general and administrative expenses 6.2(537,075)(456,324)(343,004)
Net impairment losses on financial assets 13(18,808)(6,364)(7,551)
Other operating income and expenses, net (916)  
Profit from operations198,962 206,707 144,433 
Finance income74,777 2,832 652 
Finance expense7(23,753)(16,552)(12,708)
Other financial results, net711,342 173 (3,923)
Financial results, net(7,634)(13,547)(15,979)
Share of results of investment in associates12.289 119 (233)
Other income and expenses, net86,602 (395)(3,369)
Profit before income tax198,019 192,884 124,852 
Income tax9.1(39,511)(43,405)(28,497)
Net income for the year 158,508 149,479 96,355 
Other comprehensive income (loss) net of income tax effects    
Items that may be reclassified subsequently to profit and loss:    
- Exchange differences on translating foreign operations (16,721)(21,770)(3,733)
- Net change in fair value on financial assets measured at FVOCI 119 (107)1 
- Gains and losses on cash flow hedges9,327 (3,171)11 
Total comprehensive income for the year 151,233 124,431 92,634 
Net income attributable to:    
Owners of the Company 158,538 148,891 96,065 
Non-controlling interest (30)588 290 
Net income for the year 158,508 149,479 96,355 
Total comprehensive income for the year attributable to:    
Owners of the Company 148,732 123,044 92,344 
Non-controlling interest 2,501 1,387 290 
Total comprehensive income for the year 151,233 124,431 92,634 
 
F-6

GLOBANT S.A.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(in thousands of U.S. dollars, except per share amounts)

  For the year ended December 31,
 Notes202320222021
Earnings per share    
Basic 103.72 3.55 2.35 
Diluted103.64 3.47 2.28 
Weighted average of outstanding shares (in thousands)
Basic1042,601 41,929 40,940 
Diluted1043,594 42,855 42,076 
 
The accompanying notes 1 to 34 are an integral part of these consolidated financial statements
F-7

GLOBANT S.A.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 2023 AND 2022
(in thousands of U.S. dollars) 
  As of December 31,
 Notes20232022
ASSETS   
Current assets   
Cash and cash equivalents 11307,223 292,457 
Investments12.116,070 48,408 
Trade receivables13499,283 424,810 
Other assets1731,753 15,197 
Other receivables1454,786 70,212 
Other financial assets 1815,418 6,529 
Total current assets924,533 857,613 
Non-current assets  
Investments12.11,833 1,513 
Other assets174,088 10,657 
Other receivables1426,475 21,141 
Deferred tax assets9.260,777 41,982 
Investment in associates12.21,426 1,337 
Other financial assets 1834,864 34,978 
Property and equipment15162,736 161,733 
Intangible assets16235,540 182,572 
Right-of-use asset28119,400 147,311 
Goodwill26.41,163,683 734,952 
Total non-current assets1,810,822 1,338,176 
TOTAL ASSETS2,735,355 2,195,789 
LIABILITIES  
Current liabilities  
Trade payables19124,545 89,397 
Payroll and social security taxes payable20221,843 203,819 
Borrowings21156,916 2,838 
Other financial liabilities 1881,504 59,316 
Lease liabilities2847,852 37,681 
Tax liabilities2233,229 23,454 
Income tax payable11,287 11,276 
Other liabilities 896 808 
Total current liabilities678,072 428,589 
Non-current liabilities  
Trade payables192,981 5,445 
Borrowings212,191 861 
Other financial liabilities18163,318 78,055 
Lease liabilities2870,884 97,457 
Deferred tax liabilities9.29,706 11,291 
Payroll and social security taxes payable205,139 4,316 
Contingent liabilities2316,448 13,615 
Total non-current liabilities270,667 211,040 
TOTAL LIABILITIES 948,739 639,629 
Capital and reserves 
Issued capital51,705 50,724 
Additional paid-in capital 1,022,918 950,520 
Other reserves (42,048)(32,242)
Retained earnings  697,089 538,551 
Total equity attributable to owners of the Company1,729,664 1,507,553 
Non-controlling interests56,952 48,607 
Total equity 1,786,616 1,556,160 
TOTAL EQUITY AND LIABILITIES 2,735,355 2,195,789 
The accompanying notes 1 to 34 are an integral part of these consolidated financial statements
F-8

GLOBANT S.A.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(in thousands of U.S. dollars except number of shares issued)

 
Number of
Shares
Issued (1)
Issued
capital
Additional
paid-in
capital
Retained
earnings
Foreign
currency
translation reserve
Investment
revaluation
reserve
Attributable
to owners of
the Parent
Non-controlling interestsTotal
Balance at January 1, 202139,884,788 47,861 541,157 293,595 (2,895)221 879,939  879,939 
Issuance of shares under share-based compensation plan (see note 30.1)449,078 539 27,065 — — — 27,604 — 27,604 
Issuance of shares under ESPP plan (note 25.4)7,453 9 2,331 — — — 2,340 — 2,340 
Issuance of shares under subscription agreement (see note 30.1)38,879 47 9,074 — — — 9,121 — 9,121 
Equity settled deferred consideration ( note 26)— — 2,152 — — — 2,152 — 2,152 
Common shares issued pursuant to the May 2021 public offering (see note 30.2)1,380,000 1,656 284,551 — — — 286,207 — 286,207 
Share-based compensation plan (see note 25)— — 29,209 — — — 29,209 — 29,209 
Repurchase of shares (note 25.4)(27,000)(32)(7,224)— — — (7,256)— (7,256)
Non-controlling interest arising on a business combination (note 26)— — — — — — — 2,648 2,648 
Put option over non-controlling interest (note 3.13.3)— — (16,285)— — — (16,285)— (16,285)
Other comprehensive income (loss) for the year— — — — (3,733)12 (3,721)— (3,721)
Net income for the year— — — 96,065 — — 96,065 290 96,355 
Balance at December 31, 202141,733,198 50,080 872,030 389,660 (6,628)233 1,305,375 2,938 1,308,313 
F-9

GLOBANT S.A.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(in thousands of U.S. dollars except number of shares issued)

 
Number of
Shares
Issued (1)
Issued
capital
Additional
paid-in
capital
Retained
earnings
Foreign
currency
translation reserve
Investment
revaluation
reserve and cash flow hedge reserve
Attributable to owners of the ParentNon-controlling interestsTotal
Balance at January 1, 202241,733,198 50,080 872,030 389,660 (6,628)233 1,305,375 2,938 1,308,313 
Issuance of shares under share-based compensation plan (see note 30.1)360,680 433 35,641 — — — 36,074 — 36,074 
Issuance of shares under ESPP plan (note 25.4)39,136 47 8,934 — — — 8,981 — 8,981 
Issuance of shares under subscription agreement (see note 30.1)183,145 220 35,636 — — — 35,856 — 35,856 
Share-based compensation plan (see note 25)— — 6,605 — — — 6,605 — 6,605 
Repurchase of shares (note 25.4)(46,500)(56)(9,260)— — — (9,316)— (9,316)
Put option over non-controlling interest (note 3.13.3)— — 934 — — — 934 (934) 
Non-controlling interest arising on a business combination (note 26)— — — — — — — 45,216 45,216 
Other comprehensive income (loss) for the year— — — — (21,770)(3,278)(25,847)799 (25,048)
Net income for the year— — — 148,891 — — 148,891 588 149,479 
Balance at December 31, 202242,269,659 50,724 950,520 538,551 (28,398)(3,045)1,507,553 48,607 1,556,160 
 
F-10

GLOBANT S.A.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(in thousands of U.S. dollars except number of shares issued)

 
Number of
Shares
Issued
(1)
Issued
capital
Additional
paid-in
capital
Retained
earnings
Foreign
currency
translation
reserve
Investment
revaluation
reserve and cash flow hedge reserve
Attributable to owners of the ParentNon-controlling interestTotal
Balance at January 1, 202342,269,659 50,724 950,520 538,551 (29,197)(3,045)1,507,553 48,607 1,556,160 
Issuance of shares under share-based compensation plan (see note 30.1)407,233 489 47,471 — — — 47,960 — 47,960 
Issuance of shares under ESPP plan (note 25.4)48,130 58 9,155 — — — 9,213 — 9,213 
Issuance of shares under subscription agreement (see note 30.1)403,760 485 72,441 — — — 72,926 — 72,926 
Share-based compensation plan (see note 25)— — 27,726 — — — 27,726 — 27,726 
Repurchase of shares (note 25.4)(42,500)(51)(11,472)— — — (11,523)— (11,523)
Put option over non-controlling interest (note 3.13.3)— — (72,923)— — — (72,923)(2,169)(75,092)
Non-controlling interest arising on a business combination (note 26)— — — — — — — 8,013 8,013 
Other comprehensive income (loss) for the year— — — — (19,252)9,446 (9,806)2,531 (7,275)
Net income for the year— — — 158,538 — — 158,538 (30)158,508 
Balance at December 31, 202343,086,282 51,705 1,022,918 697,089 (48,449)6,401 1,729,664 56,952 1,786,616 

(1) All shares are issued, authorized and fully paid. Each share is issued at a nominal value of $1.20 per share and entitles to one vote.

The accompanying notes 1 to 34 are an integral part of these consolidated financial statements
F-11

GLOBANT S.A.
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(in thousands of U.S. dollars)

 For the year ended December 31,
 202320222021
Cash flows from operating activities   
Net income for the year158,508 149,479 96,355 
Adjustments to reconcile net income for the year to net cash flows from operating activities:   
Share-based compensation expense72,941 60,251 37,031 
Current income tax (note 9.1)74,454 44,756 53,319 
Deferred income tax (note 9.1)(34,943)(1,351)(24,822)
Depreciation of property and equipment (note 15)32,760 25,324 19,799 
Depreciation of right-of-use assets (note 28)39,982 35,244 23,833 
Amortization of intangible assets (note 16)67,119 47,365 36,654 
(Reversal)/Impairment of intangible assets (note 16)(822)1,017 80 
Net impairment losses on financial assets18,808 6,364 7,551 
Remeasurement at fair value of investment in associates  (1,538)
(Reversal)/Allowance for claims and lawsuits (note 23)(348)1,871 5,769 
(Gain) Loss on remeasurement of contingent consideration and call/put option over non-controlling interest (note 29.9.1)(4,442)(1,147)4,694 
Gain on transactions with bonds (note 3.18)(9,157)(13,883)(708)
Accrued interest15,295 11,203 9,828 
Interest received4,718 2,686 585 
Net (gain) loss arising on financial assets measured at FVPL(23,564)7,537 8,537 
Net (gain) loss arising on financial assets measured at FVOCI (22,747)(165)130 
Exchange differences21,874 4,648 (5,708)
Share of results of investment in associates(89)(119)233 
Payments related to forward and future contracts(3,813)(6,242)(1,692)
Proceeds related to forward and future contracts24,977 3,918 1,368 
Payments of remeasured earn-outs related to acquisition of business(7,078)(4,467) 
Gain arising from lease disposals  (643)
Loss arising from property and equipment and intangibles derecognition846 1,632  
Changes in working capital:   
Net increase in trade receivables(44,297)(104,315)(93,019)
Net decrease (increase) in other receivables16,629 (21,021)(21,149)
Net increase in other assets(10,004)(9,416)(1,338)
Net increase (decrease) in trade payables19,004 (2,651)10,870 
Net (decrease) increase in payroll and social security taxes payable(37,402)13,398 66,670 
Net (decrease) increase in tax liabilities (1,675)264 4,595 
Utilization of provision for contingent liabilities (note 23)(227)(1,750)(8,113)
Income tax paid(48,783)(52,906)(50,197)
Net cash provided by operating activities318,524 197,524 178,974 
Cash flows from investing activities   
Cash outflows for property and equipment (2)
(45,110)(47,063)(42,766)
Proceeds from disposals of property and equipment and intangibles288  1,249 
Cash outflows for intangible assets (3)
(81,691)(48,367)(34,868)
Acquisition of investment in sovereign bonds(29,032)(24,883)(5,990)
Proceeds from investment in sovereign bonds38,189 38,766 6,698 
Payments related to forward and future contracts(10,906)(25,561)(13,534)
Proceeds related to forward and future contracts20,419 12,511 3,923 
Acquisition of investments measured at FVPL(384,083)(414,950)(238,991)
Proceeds from investments measured at FVPL410,707 393,059 230,236 
Acquisition of investments measured at FVOCI(214,642)(264,992)(49,965)
Proceeds from investments measured at FVOCI217,246 269,102 44,976 
Payments to acquire equity instruments (1,748)(5,148)(5,762)
Payments to acquire investments in associates (500)(1,389)
Acquisition of investment in convertible notes (note 29)(2,367)(2,667)(2,772)
Acquisition of business, net of cash (note 26) (1)
(253,691)(126,370)(144,503)
Payments of earn-outs related to acquisition of business(13,940)(22,241)(19,422)
Net cash used in investing activities(350,361)(269,304)(272,880)
F-12

GLOBANT S.A.
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(in thousands of U.S. dollars)

For the year ended December 31,
202320222021
Cash flows from financing activities   
Proceeds from the issuance of common shares pursuant to May 2021 Public Offering, net of costs  286,207 
Proceeds from the issuance of shares under the share-based compensation plan (note 30.1)4,103 3,508 6,612 
Proceeds from the issuance of shares under the ESPP plan9,213 8,981 2,340 
Repurchase of shares(11,523)(9,316)(7,256)
Payment of call/put-option over non-controlling interest(3,892)(5,166) 
Proceeds from borrowings (note 21)395,621  13,500 
Repayment of borrowings (note 21)(271,783)(8,269)(29,384)
Payments of principal portion of lease liabilities (note 28)(38,514)(30,564)(21,786)
Payments of lease liabilities interest (note 28)(6,319)(6,822)(5,415)
Interest paid (note 21)(4,106)(2,491)(832)
Payments of installments related to acquisition of business(28,270)(15,541) 
Net cash provided (used in) by financing activities44,530 (65,680)243,986 
Increase (Decrease) in cash and cash equivalents12,693 (137,460)150,080 
Cash and cash equivalents at beginning of the year292,457 427,804 278,939 
Effect of exchange rate changes on cash and cash equivalents2,073 2,113 (1,215)
Cash and cash equivalents at end of the year 307,223 292,457 427,804 
 
(1) Cash paid for assets acquired and liabilities assumed in the acquisition of subsidiaries net of cash acquired (note 26):    
Supplemental information   
Cash paid286,695 172,445 161,107 
Less: cash and cash equivalents acquired(33,004)(46,075)(16,604)
Total consideration paid net of cash and cash equivalents acquired253,691 126,370 144,503 

As of December 31, 2023, the Company issued 359,242 common shares for a total amount of 65,064, according to the subscription agreement included in the stock purchase agreement, these were non-cash transactions. As of December 31, 2022, the Company issued 135,096, common shares for a total amount of 25,531, according to the subscription agreement included in the stock purchase. 
(2)In 2023, 2022 and 2021, there were 1,741, 16,225 and 10,129 of acquisition of property and equipment financed with trade payables, respectively. In 2023, 2022 and 2021, the Company paid 16,225, 10,129 and 1,515 related to property and equipment acquired in 2022, 2021 and 2020, respectively.
(3)In 2023, 2022 and 2021 there were 132, 1,984 and 3,662 of acquisition of intangibles financed with trade payables, respectively. In 2023, 2022 and 2021 , the Company paid 1,984, 3,662 and 285 related to intangibles acquired in 2022, 2021 and 2020, respectively.

The accompanying notes 1 to 34 are an integral part of these consolidated financial statements
F-13


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)




NOTE 1 – COMPANY OVERVIEW AND BASIS OF PRESENTATION

Globant S.A. is a digitally native company organized in the Grand Duchy of Luxembourg, primarily engaged in helping organizations to reinvent themselves and unleash their potential (hereinafter the “Company” or “Globant” or “Globant Group”). Globant is the place where innovation, design and engineering meet scale.

The Company's principal operating subsidiaries and countries of incorporation as of December 31, 2023 were the following:

CountryCompany
ArgentinaSistemas Globales S.A.
ArgentinaIAFH Global S.A.
BrazilGlobant Brasil Consultoria LTDA
ChileSistemas Globales Chile Asesorías Limitada
ColombiaSistemas Colombia S.A.S.
IndiaGlobant India Private Limited
ItalySysdata SpA
MexicoIAFH Globant IT Mexico S. de R.L. de C.V.
MoldovaPentalog Chi SRL
PeruGlobant Peru S.A.C
RomaniaPentalog Romania SRL
SpainSoftware Product Creation, S.L.
SpainSports Reinvention Entertainment Group S.L.
United KingdomGlobant UK Limited
United States of AmericaGlobant LLC
United States of AmericaGrupo Assa Corp
United States of AmericaGlobant IT Services
UruguaySistemas Globales Uruguay S.A.

The Company also has centers of software engineering talent and educational excellence, primarily across Latin America.

Most of the revenues are generated through subsidiaries located in the U.S. The Company's workforce is mainly located in Latin America and to a lesser extent in India, Europe and the U.S.

The Company's registered office address is 37A Avenue J.F. Kennedy L-1855, Luxembourg.

NOTE 2 – BASIS OF PREPARATION OF THESE CONSOLIDATED FINANCIAL STATEMENTS

These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). These consolidated financial statements are presented in thousands of United States dollars ("U.S. dollars") and have been prepared under the historical cost convention except as disclosed in the accounting policies below.

2.1 – Application of new and revised International Financial Reporting Standards

Adoption of new and revised standards

The Company has adopted all of the new and revised standards and interpretations issued by the IASB that are relevant to its operations and that are mandatorily effective at December 31, 2023. The impact of the new and revised standards and interpretations mentioned on these consolidated financial statements is described as follows.
F-14


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



The Company has adopted the following standards and interpretation that became applicable for annual periods commencing on or after January 1, 2023:

Amendments to IAS 1 and IFRS Practice Statement 2Disclosure of Accounting Policies
Amendments to IAS 8Definition of Accounting Estimates
Amendments to IAS 12Deferred Tax related to Assets and Liabilities arising from a Single Transaction
Amendments to IAS 12International Tax Reform — Pillar Two Model Rules

On May 23, 2023, the IASB issued 'International Tax Reform - Pillar Two Model Rules (Amendments to IAS 12)' providing a temporary exception to the requirements regarding deferred tax assets and liabilities related to pillar two income taxes. This amendment provides an exception rule that temporarily exempts the recognition and disclosure of deferred taxes related to taxes arising from the taxation system on the pillar two model rules published by the Organization for Economic Co-operation and Development (OECD) (hereinafter, the “Pillar Two Income Taxes”).

The Group has applied the aforementioned exception rule retroactively from fiscal year 2023 and has not recognized and disclosed the deferred taxes related to the Pillar Two Income Taxes (see note 9.3).

On July 28, 2023, Luxembourg’s government council approved a new bill aiming to implement into Luxembourg law the “Pillar Two Directive”. It is expected that the Pillar Two Directive will be effective as from January 1, 2024. Management is currently assessing the jurisdictions that could give rise to additional taxation and potential impact as a result of the implementation of the Pillar Two Model Rules in national laws.

Those amendments did not have any material impact on the Company's accounting policies, apart from the ones already mentioned, and did not require retrospective adjustments.

New accounting pronouncements

The Company has not applied the following new and revised IFRSs that have been issued but are not yet mandatorily effective:

Amendments to IAS 21
Lack of Exchangeability1

1 Effective for annual reporting periods beginning on or after January 1, 2025. Earlier application is permitted.

• On August 15, 2023 IASB issued 'Lack of Exchangeability (Amendments to IAS 21)' to specify when a currency is exchangeable and how to determine the exchange rate when it is not.

The management of the Company is currently assessing the impacts of the application of this amendment on the Company's consolidated financial statements. This amendment is effective for annual periods beginning on or after January 1, 2025. Earlier application is permitted. The Company has not opted for early application.

The following standards and interpretation will become applicable for annual periods commencing on or after January 1, 2024:

Amendments to IAS 1Classification of Liabilities as Current or Non-Current
Amendments to IFRS 16 Lease Liability in a Sale and Leaseback
Amendments to IAS 1Non-current Liabilities with Covenants
Amendments to IAS 7 and IFRS 7Supplier Finance Arrangements

• On January 23, 2020, the IASB issued 'Classification of Liabilities as Current or Non-current (Amendments to IAS 1)' providing a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date.
F-15


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



The management of the Company does not anticipate that the application of this amendment will have a material impact on the Company's consolidated financial statements. This amendment is effective for annual periods beginning on or after January 1, 2024. Earlier application is permitted. The Company has not opted for early application.

• On September 22, 2022, IASB issued 'Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)' specifying the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains.

The management of the Company does not anticipate that the application of this amendment will have a material impact on the Company's consolidated financial statements. This amendment is effective for annual periods beginning on or after January 1, 2024. Earlier application is permitted. The Company has not opted for early application.

• On October 31, 2022, IASB issued 'Non-current Liabilities with Covenants (Amendments to IAS 1)' to clarify how conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability.

The management of the Company does not anticipate that the application of this amendment will have a material impact on the Company's consolidated financial statements. This amendment is effective for annual periods beginning on or after January 1, 2024. Earlier application is permitted. The Company has not opted for early application.

• On May 25, 2023, the IASB issued 'Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)' to require specific disclosure requirements about supplier finance arrangements.

The management of the Company does not anticipate that the application of this amendment will have a material impact on the Company's consolidated financial statements. This amendment is effective for annual periods beginning on or after January 1, 2024. Earlier application is permitted. The Company has not opted for early application.

2.2 – Basis of consolidation

These consolidated financial statements include the consolidated financial position, results of operations and cash flows of the Company and its consolidated subsidiaries. Control is achieved where the company has the power over the investee; exposure, or rights, to variable returns from its involvement with the investee and the ability to use its power over the investee to affect the amount of the returns. All intercompany transactions and balances between the Company and its subsidiaries have been eliminated in the consolidation process.

Non-controlling interest in the equity of consolidated subsidiaries is identified separately. Non-controlling interest consists of the amount of that interest at the date of the original business combination and the non-controlling share of changes in equity since the date of the consolidation.

Acquired companies are accounted for under the acquisition method whereby they are included in the consolidated financial statements from their acquisition date.

NOTE 3 – SUMMARY OF MATERIAL ACCOUNTING POLICIES
 
3.1 – Acquisitions

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition date fair values of the assets transferred to the Company, liabilities incurred by the Company to the former owners of the acquiree and the equity interests issued by the Company in exchange for control of the acquiree. Acquisition-related charges are recognized in profit or loss as incurred.

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair value, except that:

deferred tax assets or liabilities, and assets or liabilities related to employee benefit arrangements are recognized and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively; and
F-16


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Company entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 Share-based Payment at the acquisition date.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquired business, and the fair value of the acquirer's previously held equity interest in the acquired business (if any) over the net of the acquisition date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquired business and the fair value of the acquirer's previously held equity interest in the acquired business (if any), the excess is recognized immediately in profit or loss as a bargain purchase gain.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests' proportionate share of the recognized amounts of the acquired business identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis.

When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the 'measurement period' (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with IFRS 3 and IFRS 13, as appropriate, with the corresponding gain or loss being recognized in profit or loss.

When a business combination is achieved in stages, the Company's previously held equity interest in the acquiree is remeasured to its acquisition-date fair value and the resulting gain or loss, if any, is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.

Arrangements that include remuneration of former owners of the acquiree for future services are excluded of the acquisitions and will be recognized as expense during the required service period.

3.2 – Goodwill

Goodwill arising in a business combination is carried at cost as established at the acquisition date of the business less accumulated impairment losses, if any. For the purpose of impairment testing, goodwill is allocated to a unique cash generating unit (CGU).

Goodwill is not amortized and is reviewed for impairment at least annually or more frequently when there is an indication that the business may be impaired. If the recoverable amount of the business is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the business and then to the other assets of the business pro-rata on the basis of the carrying amount of each asset in the business. Any impairment loss for goodwill is recognized directly in profit or loss in the consolidated statement of comprehensive income. An impairment loss recognized for goodwill is not reversed in a subsequent period.

The Company has not recognized any impairment loss in the years ended December 31, 2023, 2022 and 2021.
F-17

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)
3.3 – Revenue recognition

The Company generates revenue primarily from the provision of software development, testing, infrastructure management, application maintenance, outsourcing services, consultancy and Services over Platforms (SoP). SoP is a new concept for the services industry that aims to deliver digital journeys in more rapid manner providing specific platforms as a starting point and then customizing them to the specific need of the customers. Revenue is measured at the fair value of the consideration received or receivable.

The Company’s services are performed under both time-and-material and fixed-price contracts. For revenues generated under time-and-material contracts, revenues are recognized as a single performance obligation satisfied over time, using an input method based on hours incurred. The majority of such revenues are billed on an hourly, daily or monthly basis whereby actual time is charged directly to the client.

The Company recognizes revenues from fixed-price contracts applying the input or output methods depending on the nature of the project and the agreement with the customer, recognizing revenue on the basis of the Company’s efforts to the satisfaction of the performance obligation relative to the total expected inputs to the satisfaction of the performance obligation, or recognizing revenue on the basis of direct measurements of the value to the customer of the services transferred to date relative to the remaining services promised under the contract, respectively. Each method is applied according to the characteristics of each contract and client. The inputs and outputs are selected based on how faithfully they depict the Company's performance towards complete satisfaction of the performance obligation.

These methods are followed where reasonably dependable estimates of revenues and costs can be made. Fixed-price projects generally correspond to short-term contracts. Some fixed-price contracts are recurring contracts that establish a fixed amount per month and do not require the Company to apply significant judgment in accounting for those types of contracts. In consequence, the use of estimates is only applicable for those contracts that are on-going at the year end and that are not recurring.

Reviews to these estimates may result in increases or decreases to revenues and income and are reflected in the consolidated financial statements in the periods in which they are first identified. If the estimates indicate that a contract loss will be incurred, a loss provision is recorded in the period in which the loss first becomes probable and reasonably estimable. Contract losses are determined to be the amount by which the estimated costs of the contract exceed the estimated total revenues that will be generated by the contract and are included in cost of revenues in the consolidated statement of comprehensive income. Contract losses for the periods presented in these consolidated financial statements were immaterial.

The Company provides hosted access to software applications for a license fee. The revenue from these licenses contracts is recognized at a point in time, given that the performance obligation is satisfied when the contract is signed by the customer and the Company. In some cases, as licenses resales, the Company acts as an agent because the performance obligation is to arrange for the service to be provided to the customer by another party (the owner of the software applications). Consequently, the revenue is measured as the amount of the commission, which is the net amount of consideration that the Company retains after paying the other party the consideration received in exchange for the services to be provided by that party.

3.4 – Leases

The Company recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (leases with a lease term of 12 months or less) and leases of low value assets (assets with a value of 5 or less when new). For these leases, the Company recognizes the lease payments as an operating expense on a straight line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

fixed payments, less any lease incentives receivable;
variable lease payments that are based on an index or a rate;
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.



GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee's incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.

The Company remeasures the lease liability (and makes a corresponding adjustment to the related right–of–use asset) whenever:
1.the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
2.the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
3.a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

The Company made adjustments related to leases that are subject to changes in the consumer price index. As of December 31, 2023 and 2022, such adjustments amounted to 2,553 and 1,762 respectively.

Right-of-use asset are measured at cost comprising the following:
the amount of the initial measurement of lease liability;
any lease payments made at or before the commencement date less any lease incentives received;
any initial direct costs and restoration costs.

Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Company incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognized and measured under IAS 37. The costs are included in the related right–of-use asset.

The right-of-use assets are presented as a separate line in the consolidated statement of financial position.

The Company applies IAS 36 Impairment of Assets to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 3.10.

Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets are assets with a value of 5 or less when new.

In determining the lease term, management considers all fact and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options and periods after termination options are only included in the lease term if the lease is reasonably certain to be extended or not terminated. The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.

3.5 – Foreign currencies

The functional currency of the Company and most of its subsidiaries is the U.S. dollar, except for some subsidiaries where their functional currency is their respective local currency considering it is the primary economic environment in which the subsidiary operates.

In preparing these consolidated financial statements, transactions in currencies other than the functional currency (“foreign currencies”) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are kept at the original translated cost. Exchange differences are recognized in profit and loss in the period in which they arise.

F-19


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



In the case of the subsidiaries with a functional currency other than the U.S. dollar, assets and liabilities are translated at current exchange closing rates at the date of that balance sheet, while income and expense are translated at the date of the transaction rate. The resulting foreign currency translation adjustment is recorded as a separate component of accumulated other comprehensive income (loss) in equity.

Accounting standards are applied on the assumption that the value of money (the unit of measurement) is constant over time. However, when the rate of inflation is no longer negligible, a number of issues arise impacting the true and fair nature of the accounts of entities that prepare their financial statements on a historical cost basis. To address such issues, entities apply IAS 29 Financial Reporting in Hyperinflationary Economies from the beginning of the period in which the existence of hyperinflation is identified. Based on the statistics published on July 17, 2018, Argentina's economy started to be considered hyperinflationary. As of December 31, 2023 and 2022, the 3-year cumulative rate of inflation for consumer prices in Argentina is 816% and 300%, respectively. As of December 31, 2023 and 2022, the Company assessed that the effects of inflation are not material to the financial statements, since the most significant Argentine subsidiaries have the U.S. dollars as their functional currency, except for Globers S.A.

3.6 – Borrowing costs

The Company does not have borrowings attributable to the construction or production of assets. All borrowing costs are recognized in profit and loss under finance loss.

3.7 – Taxation

3.7.1 – Income taxes – current and deferred

Income tax expense represents the estimated sum of income tax payable and deferred tax.

3.7.1.1 – Current income tax

The current income tax payable is the sum of the income tax determined in each taxable jurisdiction, in accordance with their respective income tax regimes.

Taxable profit differs from profit as reported in the consolidated statement of comprehensive income because taxable profit excludes items of income or expense that are taxable or deductible in future years and it further excludes items that are never taxable or deductible. The Company's liability for current income tax is calculated using tax rates that have been enacted or substantively enacted as of the date of issuance. The current income tax charge is calculated on the basis of the tax laws in force in the countries in which the consolidated entities operate.

Globant S.A, is subject to a corporate income tax rate of 17.0% on taxable income exceeding EUR 200, leading to an overall tax rate of 24.9% in Luxembourg (taking into account the solidarity surtax of 7.0% on the CIT rate, and including the 6.8% municipal business tax rate applicable).

The holding companies located in Spain elected to be included in the Spanish special tax regime for entities having substantially all of their operations outside of Spain, known as “Empresas Tenedoras de Valores en el Exterior” (“ETVE”). Globant España S.A was registered in 2008. Under the ETVE regime, dividends distributed from its foreign subsidiaries as well as any gain resulting from disposal are subject to 95% of tax exemption effective from January 1st, 2020. In order to be entitled to the benefit, among other requirements, the main activity of the entities must be the administration and management of equity instruments from non-Spanish entities and such entities must be subject to a tax regime similar to that applicable in Spain for non-ETVEs companies. As of December 31, 2023 and 2022, the Spanish Holding companies received dividends distributions for 236,909 and 2,553, respectively. If this tax exemption would not apply partially, the applicable tax rate should be 25%. The Company´s Spanish subsidiaries are subject to a 25% corporate income tax rate.

Starting fiscal year 2021, Argentina has progressive system of corporate income tax rates ranging from 25% to 35% .

On May 22, 2019, the Argentine Congress enacted Law No. 27,506 ("Ley de Economía del Conocimiento"), which provides a promotional regime for the Knowledge Economy, which was modified by means of Law No. 27,570, published on October 26, 2020 ("Knowledge based Economy Law"). The Knowledge based Economy Law is valid from January 1, 2020 until December



GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

31, 2029, and aims to promote economic activities that apply knowledge and digitization of information, supported by advances in science and technology, to obtain goods and services and improve processes.

The beneficiaries of the regime will enjoy the following benefits:
– Stability in the enjoyment of benefits.
– Beneficiaries who carry exports within the promoted activity, are not subject to any withholding and/or collection VAT regimes.
– A reduced corporate income tax rate applied to the promoted activities. The reduction is applied on the general tax rate as follows: (i) 60% for micro and small enterprises, (ii) 40% for medium-sized enterprises, and (iii) 20% for large enterprises.
– In addition, beneficiaries will be allowed to deduct as an expense, the withholding tax paid of foreign taxes, if the taxed income constitutes an Argentine source of income.
– A non-transferable tax credit of up to 70% of amounts paid for certain social security taxes (contributions) for the employees associated with the promoted activities. The credit may be offset against value-added tax liabilities within 24 months of its issuance. The credit will be increased to 80% to newly-onboarded employees if they comply with some specific considerations.
- The beneficiaries that export at least 70% of its annual sales originated in the promoted activities, will be allowed to transfer for one time the credit, up to an amount equivalent to the percentage of exports for each period
– A 0% rate of export duties applicable to the export of services promoted by the Law.

The entities Atix Labs S.RL., Decision Support S.A, BSF S.A , IAFH Global S.A and Sistemas Globales S.A., were approved as beneficiaries of the Knowledge Economic Law by the Subsecretary of Knowledge Economy.

The Company’s Uruguayan subsidiary Sistemas Globales Uruguay S.A. is domiciled in a tax free zone and has an indefinite tax relief of 100% of the income tax rate and an exemption from VAT.
3.7.1.2 – Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets including tax loss carry forwards are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred assets and liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the entities are able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.



F-21


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. The Company has not recorded any current or deferred income tax in other comprehensive income or equity in any each of the years presented, except for deferred income tax arising from the share-based compensation plan, for the deferred income tax arising from hedge instruments and for the translation of deferred tax assets and liabilities arising from subsidiaries with functional currencies other than U.S. dollar.

Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

Under IFRS, deferred income tax assets (liabilities) are classified as non-current assets (liabilities).

3.7.1.3 – Uncertain tax treatments

The Company determines the accounting for tax position when there is uncertainty over income tax treatments as follows. First, the Company determines whether uncertain tax positions are assessed separately or as a group; and then, the Company assesses whether it is probable that a tax authority will accept an uncertain tax treatment used, or proposed to be used, by an entity in its income tax filings. If yes, the Company determines its accounting tax position consistently with the tax treatment used or planned to be used in its income tax filings. If not, the Company reflects the effect of uncertainty in determining its accounting tax position using either the most likely amount or the expected value method. The Company discloses in note to the consolidated financial statements certain matters related to the interpretation of income tax laws for which there is a possibility that a loss may have been incurred.

As of December 31, 2023 and 2022, there are certain matters related to the interpretation of income tax laws for which there is a possibility that a loss may have been incurred (assessed as not probable), as of the date of the financial statements in accordance with IFRIC 23 in an amount of 4,544 and 5,119, related to assessments for the fiscal years 2017 to 2023 and 2016 to 2022, respectively. No formal claim has been made for fiscal years within the statute of limitation by Tax authorities in any of the mentioned matters, however those years are still subject to audit and claims may be asserted in the future.

3.8 – Property and equipment

Fixed assets are valued at acquisition cost, net of the related accumulated depreciation and accumulated impairment losses, if any.

Depreciation is recognized so as to write off the cost or valuation of assets less their residual values over their useful lives, using the straight-line method.

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Lands and properties under construction are carried at cost, less any recognized impairment loss. Properties under construction are classified to the appropriate categories of property and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use. Land is not depreciated.

An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss. As of December 31, 2023 and 2022, the Company has derecognized property and equipment for an amount of 574 and 101, respectively.

The value of fixed assets, taken as a whole, does not exceed their recoverable value.
 


F-22


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

3.9 – Intangible assets

Intangible assets include licenses, customer relationships, customer contracts, non-compete agreements, platforms and cryptocurrencies. The accounting policies for the recognition and measurement of these intangible assets are described below.
3.9.1 – Intangible assets acquired separately

Intangible assets with finite useful life that are acquired separately (licenses) are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over the intangible assets estimated useful lives. The estimated useful lives and amortization method are reviewed at the end of each annual reporting period, with the effect of any changes in estimates being accounted for on a prospective basis.

3.9.1.1 - Cryptocurrencies

The Company accounts for its crypto assets as indefinite-lived intangible assets in accordance with IAS 38 "Intangible Assets". Bitcoin, Ethereum and Stable Coin are cryptocurrencies that are considered to be an indefinite lived intangible asset because they lack physical form and there is no limit to its useful life, they are not subject to amortization but they are tested for impairment.

The Company's crypto assets are initially recorded at cost. Subsequently, they are measured at cost, net of any impairment losses incurred since acquisition. The Company performs monthly analysis to identify possible impairment. If the carrying value of the crypto asset exceeds the fair value based on the quoted price in the active exchange market, the Company will recognize an impairment loss equal to the difference between the fair value and the book value in the consolidated statement of comprehensive income. Gains, if any, will not be recognized until realized upon sale in the consolidated statement of comprehensive income. Further details are disclosed in note 16. As of December 31, 2023 and 2022, the Company has recognized a gain of 822 as reversal of impairment and a loss of 1,017 as impairment, respectively.

3.9.2 – Intangible assets acquired in a business combination

Intangible assets acquired in a business combination (customer relationships, customer contracts, non-compete agreements, software and platforms) are recognized separately from goodwill and are initially recognized at their fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortization and accumulated impairment losses if any, on the same basis as intangible assets acquired separately.

3.9.3 – Internally-generated intangible assets

Intangible assets arising from development are recognized if, and only if, all the following have been demonstrated:
- the technical feasibility of completing the intangible asset so that it will be available for use or sale;
- the intention to complete the intangible asset and use or sell it;
- the ability to use or sell the intangible asset;
- how the intangible asset will generate probable future economic benefits;
- the ability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, and
- the ability to measure reliably the expenditure attributable to the intangible asset during its development.

The amount initially recognized for internally-generated assets is the sum of expenditure incurred (including employee costs and an appropriate proportion of overheads) from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognized, development expenditure is recognized in profit or loss in the period in which it is incurred.

Capitalized intangible assets are amortized from the point at which the asset is ready for use. Subsequent to initial recognition, intangible assets are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. Costs associated with maintaining software programs are recognized as an expense as incurred.
F-23


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)


3.9.4 – Derecognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognized in profit or loss when the asset is derecognized. As of December 31, 2023 and 2022, the Company has derecognized intangible assets for an amount of 560 and 1,531, respectively.

3.10 – Impairment of tangible and intangible assets excluding goodwill

At each balance sheet date, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit or the business, as the case may be.

The recoverable amount of an asset is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognized immediately in the statement of comprehensive income for the year.

As of December 31, 2023, 2022 and 2021 the Company did not recognize impairments related to internally-generated intangible assets.

3.11 – Contingent liabilities

The Company has existing or potential claims, lawsuits and other proceedings. Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation, and the advice of the Company’s legal advisors.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. The amount of the recognized receivable does not exceed the amount of the provision recorded.

3.12 – Financial assets

On initial recognition, a financial asset is classified as measured at: (i) amortized cost (ii) fair value through other comprehensive income (FVOCI) or (iii) fair value through profit or loss (FVTPL). The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics.

3.12.1 – Amortized cost and effective interest method

A financial asset is measured at amortized cost if both of the following conditions are met, and if it is not designated as at FVPL:
-    It is held within a business model whose objective is to hold financial assets to collect contractual cash flow;
-    Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
F-24


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)


The effective interest method is a method of calculating the amortized cost of an instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the instrument, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

3.12.2 – Financial assets measured at FVOCI

A financial asset is measured at FVOCI if both of the following conditions are met, and if it is not designated as at FVPL:
-    It is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets
-    Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

The change in fair value of financial assets measured at FVOCI is accumulated in the investment revaluation reserve until they are derecognized. When a financial asset measured at FVOCI is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.

3.12.3 – Financial assets measured at FVPL
 
All financial assets not classified as measured at amortized cost or FVOCI as described above, are measured at FVPL.
 
Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the ‘Other financial results, net’ line.

3.12.4 - Derivative financial instruments
 
The Company enters into foreign exchange forward contracts and swaps. Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as a financial liability. Derivatives are not offset in the financial statements unless the Company has both a legally enforceable right and intention to offset. The impact of the futures and forward contracts on the Company’s financial position is disclosed in note 29. A derivative is presented as a non–current asset or a non–current liability if the remaining maturity of the instrument is more than 12 months and it is not due to be realized or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

The Company designates certain derivatives as hedging instruments in respect of foreign currency risk in cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.

At the inception of the hedge relationship, the Company documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Company documents whether the hedging instrument is effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk, which is when the hedging relationships meet all of the following hedge effectiveness requirements:
- there is an economic relationship between the hedged item and the hedging instrument;
- the effect of credit risk does not dominate the value changes that result from that economic relationship; and
- the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Company actually hedges and the quantity of the hedging instrument that the Company actually uses to hedge that quantity of hedged item.
F-25


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)


If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk management objective for that designated hedging relationship remains the same, the Company adjusts the hedge ratio of the hedging relationship (i.e. rebalances the hedge) so that it meets the qualifying criteria again.

The Company designates the full change in the fair value of a forward contract (i.e. including the forward elements) as the hedging instrument for all of its hedging relationships involving forward contracts.

Movements in the hedging reserve in equity are detailed in note 30.3.

The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated and qualify as cash flow hedges is recognized in other comprehensive income and accumulated under the heading of cash flow hedging reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss, and is included in the ‘Other financial results, net’ line item. Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognized hedged item.

The Company discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying criteria (after rebalancing, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised. The discontinuation is accounted for prospectively. Any gain or loss recognized in other comprehensive income and accumulated in cash flow hedge reserve at that time remains in equity and is reclassified to profit or loss when the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in cash flow hedge reserve is reclassified immediately to profit or loss.

3.12.5 - Investment in associates
 
An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
 
The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting. Under the equity method, an investment in associate is initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate.

3.12.6 – Impairment of financial assets
 
The Company recognizes a loss allowance for expected credit losses on financial assets, other than those at FVTPL. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.
 
The Company always recognizes lifetime expected credit losses ("ECL") for trade receivables, using a simplified approach. The expected credit losses on these financial assets are estimated using a provision matrix based on the Company’s historical credit loss experience, adjusted for factors that are specific to debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date.

For all other financial instruments, the Company recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

A significant increase in credit risk is presumed if a debtor is more than 30 days past due in making a contractual payment, unless the Company has reasonable and supportable information that demonstrates otherwise.
F-26


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)


Definition of default

A default on a financial asset is when the counterparty fails to make contractual payments within 90 days of when they fall due, unless an entity has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.

Credit-impaired financial assets

A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired include observable data about the following events:
a. significant financial difficulty of the issuer or the borrower;
b. a breach of contract, such as a default or past due event;
c. the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
d. it is becoming probable that the borrower will enter bankruptcy or other financial reorganization;
e. the disappearance of an active market for that financial asset because of financial difficulties; or
f. the purchase or origination of a financial asset at a deep discount that reflects the incurred credit losses.
It may not be possible to identify a single discrete event-instead, the combined effect of several events may have caused financial assets to become credit-impaired.

Write-off policy

Financial assets' carrying amounts are reduced through the use of an allowance account on a case-by-case basis. When a financial asset is considered uncollectable, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit and loss.

 Measurement and recognition of expected credit losses

The measurement of expected credit losses is a function of the probability of default, loss given default and the exposure at default. The assessment of the probability of default and loss given default is based on historical data, adjusted by forward-looking information as described above. The exposure of default is represented by the asset's gross carrying amount at the reporting date.

To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. Financial assets other than trade receivables, have been grouped at the lowest levels for which there are separately identifiable cash flows. 

No significant changes to estimation techniques or assumptions were made during the reporting period.
 
3.12.7 – Derecognition of financial assets
 
The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.
 
As of December 31, 2022 the Company incurred in a collection in advance benefit that some clients offer with JP Morgan for a total amount of 2,594. As of December 31, 2023, the Company has no collections in advance benefits with JP Morgan. The Company considers that it has substantially transferred the risks and rewards intrinsic to these receivables to the bank and therefore they were derecognized.
F-27


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)


3.12.8 – Convertible Notes

The Company recognizes convertible notes measured at their fair value using the market approach which consist in using price and relevant information generated by market transactions involving identical or comparable assets, liabilities or group of assets and liabilities, such as a business.

As of December 31, 2023 and 2022, the fair value of the loan agreement amounted to 3,359 and 2,491 disclosed as other financial assets current, respectively, and 5,751 and 4,193 disclosed as other financial assets non-current, respectively.

3.12.8.1 Convertible notes - Globant España

As of December 31, 2023, Globant España S.A, maintains 15 note purchase agreements with Fivvy Inc, Inipop LLC, Linked Ai, Polemix Inc, MessageLOUD, Inc., LookApp S.A.S, UALI Holding Limited, B2CHAT S.A.S, Avancargo Corp, Poderio S.A.S, Vozy, Inc and Drixit Technologies Inc. (the "startups"), pursuant to which Globant España S.A. provided financing facility for a total amount of 8,200. Interest on the entire outstanding principal balance is computed at annual rates ranging from 2% to 8%. Globant España S.A. has the right to convert all or any portion of the outstanding principal into equity interests of the startups.

3.12.8.2 Convertible notes - Sistemas Globales

As of December 31, 2023, Sistemas Globales S.A. maintains, since its merger with Globant Ventures SAS, 5 note purchase agreements with Interactive Mobile Media S.A. (CamonApp), AvanCargo Corp., TheEye S.A.S., Robin and Woolabs S.A. (the "startups"), pursuant to which Sistemas Globales S.A. provided financing facility for a total amount of 910. Interest on the entire outstanding principal balance is computed at annual rates ranging from 5% to 12%. Sistemas Globales S.A. has the right to convert all or any portion of the outstanding principal into equity interests of the startups.

3.12.9 – Equity Instruments

The Company recognizes equity instruments measured at their fair value using the market approach which consist in using price and relevant information generated by market transactions involving identical or comparable assets, liabilities or group of assets and liabilities, such as a business.

As of December 31, 2023 and 2022, the fair value of equity instruments amounted to 28,743 and 27,521 disclosed as other financial assets non-current, and 611 and 371 disclosed as other financial assets current.

3.13 – Financial liabilities and equity instruments issued by the Company
 
3.13.1 – Classification as debt or equity
 
Debt and equity instruments issued by the Company and its subsidiaries are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
 
3.13.2 – Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

Repurchase of the Company’s own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.

3.13.3 – Financial liabilities
 
F-28


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

Financial liabilities, including trade payables, other liabilities and borrowings, are initially measured at fair value, net of transaction costs.
Financial liabilities are subsequently measured at amortized cost using the effective interest method, with interest expense recognized on an effective yield basis.
 
The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
 
Put option over non-controlling interest in subsidiary

On July 8, 2021 the Company entered into a put and call option agreement with the non-controlling shareholders over the remaining twenty percent (20%) over Walmeric Soluciones, S.L., which can be exercised by the non-controlling shareholders from March 1, 2022 till March 1, 2024. The Company did not recognized the call option since it was immaterial.

During 2022 the sellers of Walmeric exercised their put option for the 6% over the non-controlling interest for a total consideration of 5,166.

On March 16, 2023, Software Product Creation, S.L. (the "Majority Shareholder") with Internet Business Intelligent Insite, S.L. and Next Generation Communication Services (jointly referred to as the "the Sellers"), entered into a new agreement pursuant to which the parties agree to transfer the remaining shares (the 14% of non-controlling interest) for a cash payment equal to the value of the Put Option of the year 2023 plus a contingent consideration to be determined based on the terms of the Put Option of the year 2024, which is subject to the achievement of financial targets for the year 2023. The result for the transaction amounted to 1,589 and is disclosed in Other income and expenses, net line item.

On October 19, 2023, Globant España entered into a Put and Call option agreement (the "Option Agreement") with the equity holders of the remaining forty per cent (40%) of the issued and outstanding equity interest of GUT UK (the "Selling Shareholders" and the "Option Shares", respectively), with the purpose of setting out the terms and conditions whereby: (i) a put option over the Option Shares to be granted by Globant España in favor of the Selling Shareholders; and (ii) a call option over the Option Shares to be granted by the Selling Shareholders in favor of Globant España.

The Selling Shareholders and Globant España shall be entitled to acquire 10% of the equity interest in GUT UK upon exercise of each of the yearly (call or put, as applicable) options, under the following conditions and within the following calendar:

i.Subject to and based on the achievement of the 2023 financial targets, the 2023 put option or the 2023 call option may be exercised by the Selling Shareholders or Globant España, respectively, from March 1, 2024 to April 15, 2024 (the “2023 Yearly Option");

ii.Subject to and based on the achievement of the 2024 financial targets, the 2024 put option or the 2024 call option may be exercised by the Selling Shareholders or Globant España, respectively, from March 1, 2025 to April 15, 2025 (the “2024 Yearly Option”);

iii.Subject to and based on the achievement of the 2025 financial targets, the 2025 put option or the 2025 call option may be exercised by the Selling Shareholders or Globant España, respectively, from March 1, 2026 to April 15, 2026 (the “2025 Yearly Option”); and

iv.Subject to and based on the achievement of the 2026 Targets, the 2026 put option or the 2026 call option may be exercised by the Selling Shareholders or Globant España, respectively, from March 1, 2027 to April 15, 2027 (the “2026 Yearly Option”).

The amount that may become payable under the option on exercise is initially recognized at the present value of the redemption amount within other financial liabilities with a corresponding charge directly to equity. The charge to equity is recognized separately as written put options over non-controlling interests.

The liability is subsequently accreted through finance charges up to the redemption amount that is payable at the date at which the option first becomes exercisable. In the event that the option expires unexercised, the liability is derecognised with a corresponding adjustment to equity.
F-29


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)


As of December 31, 2023, the Company has recognized as current and non-current other financial liabilities the written put option for an amount 13,006 and 62,807, respectively, equal to the present value of the redemption amount. As of December 31, 2022, the Company has recognized as current and non-current other financial liabilities the written put option for an amount 3,871 and 5,515, respectively, equal to the present value of the redemption amount. Changes in the measurement of the gross obligation will be recognized in the statements of changes in equity.

3.13.4 – Derecognition of financial liabilities
 
The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.  

3.14 – Cash and cash equivalents
 
For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand and in banks and short-term highly liquid investments (original maturity of less than 90 days). In the consolidated statements of financial position, bank overdrafts are included in borrowings within current liabilities.
 
Cash and cash equivalents as shown in the statement of cash flows only includes cash and bank balances and time deposits as disclosed in note 11.  

3.15 – Reimbursable expenses
 
Out-of-pocket and travel expenses are recognized as expense in the statements of comprehensive income in the year they are incurred. Reimbursable expenses are billed to customers and presented within the line item "Revenues" in the statements of comprehensive income for the year.

3.16 - Share-based and cash-settle compensation plan
 
The Company has a share-based and cash-settle compensation plan for executives and employees of the Company and its subsidiaries. Equity-settled share-based and cash-settle payments to employees are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based and cash-settle transactions are set forth in note 25.
 
The fair value determined at the grant date of the equity-settled share-based payments is recognized to spread the fair value of each award over the vesting period on a straight-line basis, based on the Company’s estimate of equity instruments that will potentially vest, with a corresponding increase in equity. Cash-settle are recorded as liabilities and adjusted to fair value at the end of each reporting period.

3.17 – Components of other comprehensive income
 
Components of other comprehensive income are items of income and expense that are not recognized in profit or loss as required or permitted by other IFRSs. The Company included gains and losses arising from translating the financial statements of a foreign operation, the gains and losses related to the valuation of the financial assets measured at fair value through other comprehensive income and the effective portion of changes in the fair value of derivatives hedging instruments that are designated and qualify as cash flow hedges.

3.18 – Gain on transactions with bonds

During the year ended December 31, 2023, 2022 and 2021, the Company's Argentine subsidiaries, through cash received from intercompany loans and repayments of intercompany loans, acquired Argentine sovereign bonds in the U.S. market denominated in U.S. dollars.  

After acquiring these bonds, the Company's Argentine subsidiaries sold those bonds in the Argentine market. The fair value of these bonds in the Argentine market (in Argentine pesos) during the year ended December 31, 2023 and 2022 was higher than
F-30


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



its quoted price in the U.S. market (in U.S dollars) converted at the official exchange rate prevailing in Argentina, which is the rate used to convert these transactions in foreign currency into the Company's Argentine subsidiaries' functional currency, thus, as a result, the Company recognized a gain when remeasuring the fair value of the bonds in Argentine pesos into U.S. dollars at the official exchange rate prevailing in Argentina.

During the year ended December 31, 2023, 2022 and 2021, the Company recorded a gain amounting to 9,157, 13,883 and 708, respectively, due to the above mentioned transactions that were disclosed under the caption "Other financial results, net" in the consolidated statements of comprehensive income.

NOTE 4 – CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
 
In the application of the Company's accounting policies, which are described in note 3, the Company's management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years.
 
The critical accounting estimates concerning the future and other key sources of estimation uncertainty at the end of the reporting year that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next year are the following:
 
1.Income taxes
 
Determining the consolidated provision for income tax expenses, deferred income tax assets and liabilities requires judgment. The provision for income taxes is calculated over the net income of the company and is inclusive of federal, local and state taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences in each of the jurisdictions where the Company operates of temporary differences between the financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be reversed. Changes to enacted tax rates would result in either increases or decreases in the provision for income taxes in the period of changes.

The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of the deferred tax assets to be utilized. This assessment requires judgments, estimates and assumptions by management. In evaluating the Company's ability to utilize its deferred tax assets, the Company considers all available positive and negative evidence, including the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable. The Company's judgments regarding future taxable income are based on expectations of market conditions and other facts and circumstances. Any adverse change to the underlying facts or the Company's estimates and assumptions could require that the Company reduces the carrying amount of its net deferred tax assets.

The Company evaluates the uncertain tax treatment, such determination requires the use of significant judgment in evaluating the tax treatments and assessing the timing and amounts of deductible and taxable items, see note 3.7.1.3.

2.Impairment of trade receivables
 
The Company measures ECL using reasonable and supportable forward looking information, which is based on assumptions for the future movement of different economic drivers and how these drivers will affect each other. Loss given default is an estimate of the loss arising on default. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive.

F-31


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



Probability of default constitutes a key input in measuring ECL. Probability of default is an estimate of the likelihood of default over a given time horizon, the calculation of which includes historical data, assumptions and expectations of future conditions.

As of December 31, 2023 and 2022 and 2021, the Company recorded an impairment for an amount of 18,808, 6,364 and 5,323, respectively, using a provision matrix based on the Company’s historical credit loss experience, adjusted for factors that are specific to debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date.

3.Fair value measurement and valuation processes
 
Certain assets and liabilities of the Company are measured at fair value for financial reporting purposes.

In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company estimates the fair value of an asset or a liability by converting future amounts (e.g. cash flows or income and expenses) to a single current (i.e. discounted) amount. Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in note 29.8.

4.Contingent Liabilities
 
Provisions are recognized according to the following conditions: (i) the Company has a present obligation (legal or constructive) as a result of a past event; (ii) it is probable that the Company will be required to settle the obligation; and (iii) a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

5.Purchase price allocation

The acquisition method of accounting is use to account for all acquisitions. Under this method, assets acquired and liabilities assumed of the Company are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company estimates the fair value of an asset or a liability by converting future amounts (e.g. cash flows or income and expenses) to a single current (i.e. discounted) amount. Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in note 29.8.

Fair value is estimated by management using a multi-period excess earnings method for customer relationships. Management’s cash flow projections for the intangible assets acquired included significant judgments and assumptions relating to revenue growth rates, customer attrition rates, and discount rates for customer relationships.

NOTE 5 – REVENUE

The following tables present the Company’s revenues disaggregated by type of contracts, by revenue source regarding the industry vertical of the client and by currency. The Company provides technology services to enterprises in a range of industry verticals such as banks, financial services and insurance, media and entertainment, professional services, consumer, retail and manufacturing, technology and telecommunications, travel and hospitality and health care. The Company understands that disaggregating revenues into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenues may be affected by economic factors. However, this information is not considered by the chief
F-32


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



operating decision-maker to allocate resources and in assessing financial performance of the Company. As noted in the business segment reporting information in note 27, the Company operates in a single operating and reportable segment.

For the year ended December 31,
By Industry vertical202320222021
Media and Entertainment454,380 376,134 272,703 
Banks, Financial Services and Insurance385,207 359,940 308,227 
Consumer, Retail & Manufacturing351,880 254,500 197,620 
Professional Services261,233 235,553 167,997 
Technology & Telecommunications255,238 250,299 155,665 
Travel & Hospitality187,346 139,170 87,567 
Health Care167,705 128,669 96,334 
Other Verticals32,950 35,978 10,965 
TOTAL2,095,939 1,780,243 1,297,078 

For the year ended December 31,
By Currency(*)
202320222021
United States dollar (USD)1,514,822 1,415,226 977,349 
European euro (EUR)251,865 116,469 111,177 
Argentine peso (ARS)74,311 57,329 47,039 
Mexican peso (MXN)73,749 57,526 40,064 
Brazilian real (BRL)58,822 30,886 23,850 
Pound sterling (GBP)35,094 31,445 20,565 
Chilean peso (CLP)33,034 42,568 57,610 
Colombian peso (COP)17,392 12,971 9,803 
Peruvian Sol (PEN)13,380 13,435 9,058 
Australian Dollar (AUD)8,873 1,593  
Saudi Riyal (SAR)6,345   
Canadian Dollar (CAD)3,743 13 242 
Indian Rupee (INR)3,596 634 321 
Others913 148  
TOTAL2,095,939 1,780,243 1,297,078 

(*) Billing currency.
For the year ended December 31,
By Contract Type202320222021
Time and material contracts1,654,280 1,475,848 1,062,171 
Fixed-price contracts383,867 273,344 218,846 
Licenses, resales and others57,792 31,051 16,061 
TOTAL2,095,939 1,780,243 1,297,078 

F-33


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



NOTE 6 – COST OF REVENUES AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

6.1 - Cost of revenues
 For the year ended December 31,
 202320222021
Salaries, employee benefits and social security taxes(1,158,669)(1,014,469)(745,307)
Professional services(104,916)(37,293)(23,989)
Depreciation and amortization expense(18,057)(13,510)(10,730)
Share-based compensation expense - Equity settled(15,155)(4,917)(3,568)
Travel and housing(11,669)(11,057)(4,950)
Depreciation expense of right-of-use assets(10,540)(9,802)(3,392)
Office expenses(7,348)(8,817)(6,607)
Recruiting, training and other employee expenses(6,818)(3,150)(2,860)
Promotional and marketing expenses(5,319)(4,111)(687)
Share-based compensation expense - Cash settled(1,687)(3,722) 
TOTAL(1,340,178)(1,110,848)(802,090)
 
6.2 - Selling, general and administrative expenses
 
 For the year ended December 31,
 202320222021
Salaries, employee benefits and social security taxes(212,381)(173,472)(139,307)
Depreciation and amortization expense(81,822)(59,179)(45,723)
Share-based compensation expense - Equity settled(57,297)(52,144)(38,849)
Professional services(49,921)(40,546)(30,947)
Depreciation expense of right-of-use assets(29,442)(25,442)(20,441)
Office expenses(26,669)(24,992)(18,298)
Promotional and marketing expenses(26,323)(26,976)(10,299)
Taxes(20,023)(17,609)(13,260)
Travel and housing(17,818)(17,159)(5,414)
Rental expenses(9,149)(7,448)(6,045)
Recruiting, training and other employee expenses(5,714)(10,346)(11,575)
Share-based compensation expense - Cash settled(634)(770) 
Legal claims118 (241)(2,846)
TOTAL(537,075)(456,324)(343,004)

F-34


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



NOTE 7 – FINANCE INCOME / EXPENSE/ OTHER FINANCIAL RESULTS
 
 For the year ended December 31,
 202320222021
Finance income
Interest gain4,777 2,832 652 
TOTAL4,7772,832652
Finance expense
Other interest (9,647)(4,722)(4,150)
Interest expense on lease liabilities(6,319)(6,822)(5,415)
Interest expense on borrowings(4,106)(2,491)(915)
Banking expenses(3,423)(2,290)(2,085)
Other(258)(227)(143)
TOTAL(23,753)(16,552)(12,708)
Other financial results, net
Net gain (loss) arising from financial assets measured at fair value through PL23,564 (7,537)(8,537)
Gain on transaction with bonds9,157 13,883 708 
Net gain arising from financial assets measured at fair value through OCI630 500 6 
Foreign exchange (loss) gain, net (22,009)(6,673)3,900 
TOTAL11,342 173 (3,923)

NOTE 8 – OTHER INCOME AND EXPENSES, NET

For the year ended December 31,
202320222021
Other Expense
Fixed and intangibles assets derecognition and disposals(1,134)(1,632)(579)
Remeasurement of call/put option over non-controlling interest(39)  
Remeasurement of contingent consideration (note 29.9.1)  (4,694)
Impairment of cryptocurrencies (note 16) (1,017)(80)
Other(1,650)(293)(182)
Subtotal(2,823)(2,942)(5,535)
Other Income
Remeasurement of contingent consideration (note 29.9.1)4,227 967  
Insurance recovery (*)
2,239   
Reversal Impairment of cryptocurrencies (note 16)822   
Other Remeasurements254   
Remeasurement of call/put option over non-controlling interest 180  
Remeasurement at FV of investment in associates (note 12.2)  1,538 
Other1,883 1,400 628 
Subtotal9,425 2,547 2,166 
TOTAL6,602 (395)(3,369)
(*) During the last quarter of the year the Company collected 2,239 from the insurance related to the Cybersecurity Event of 2022. See note 32.1
F-35


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



NOTE 9 – INCOME TAXES

9.1 – INCOME TAX RECOGNIZED IN PROFIT AND LOSS  
 For the year ended December 31,
 202320222021
Tax expense:   
     Current tax expense(72,549)(44,756)(53,319)
     Deferred tax gain 33,038 1,351 24,822 
TOTAL INCOME TAX EXPENSE(39,511)(43,405)(28,497)
 
Most of the revenues are generated through subsidiaries located in the U.S. The Company's workforce is mainly located in Latin America and to a lesser extent in India, Europe and the U.S.

The following table provides a reconciliation of the statutory tax rate to the effective tax rate:
 For the year ended December 31,
 202320222021
Profit before income tax198,019 192,884 124,852 
   
Tax calculated at the tax rate in each country(40,240)(33,108)(27,757)
Argentine Knowledge Economy Law (note 3.7.1.1)2,297 1,358 1,157 
Non-deductible expenses / non-taxable gains(1,695)61 2,122 
Tax loss carry forward not recognized(207)(3,096)(2,873)
Recognition of previously unrecognized tax losses 4,993   
Foreign withholding tax(5,107)(2,683) 
Exchange difference1,130 (5,937)(1,146)
Other(682)  
INCOME TAX EXPENSE RECOGNIZED IN PROFIT AND LOSS(39,511)(43,405)(28,497)

9.2 – DEFERRED TAX ASSETS AND LIABILITIES
 As of December 31,
 20232022
Provision for vacation and bonus36,134 27,747 
Intercompany trade payables15,841 17,323 
Share-based compensation plan14,827 13,048 
Loss carryforward (1)
9,933 9,304 
Allowance for doubtful accounts4,656 1,937 
Inflation adjustment416 721 
Contingencies 242 
Other Assets(191)(2,989)
Goodwill(8,894)(6,100)
Property, equipment, intangibles and leases(29,109)(32,690)
Others7,458 2,148 
TOTAL DEFERRED TAX51,071 30,691 
 



F-36


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)




(1)As of December 31, 2023 and 2022, the detail of the loss carryforward is as follows:

20232022
CompanyLoss carryforwardExpiration dateLoss carryforwardExpiration date
Dynaflows S.A.149 2027 2027
IAFH Global S.A 2024742024
IAFH Global S.A 20255282025
IAFH Global S.A 20273,192 2027
Decision Support, S.A 20265492026
Decision Support, S.A 20271732027
BSF S.A.309 2027 2027
Atix Labs, SRL13 2026572026
Atix Labs, SRL19 20271922027
Atix Labs, SRL83 2028 2028
Gut Agency SRL1,371 2028 2028
IBS Integrated Business Solutions Consultoria1,607 does not expire does not expire
Grupo Assa Corp41 does not expire does not expire
Augmented Coding US, LLC557 does not expire106 does not expire
Augmented Coding Spain, S.A910 does not expire379 does not expire
La Liga Content Protection S.L367 does not expire does not expire
Globant Portugal Unipessoal Lda50 does not expire does not expire
Globant Colombia S.A.S. does not expire385 does not expire
Globant S.A.1,099 2038 2038
Globant España S.A.328 does not expire does not expire
Sports Reinvention Entertainment Group S.L1,890 does not expire3,669 does not expire
Gut Agency LLC1,140 does not expire does not expire
9,933 9,304 

The Company has an amount of tax losses carried forward of 2,320 which has not been recognized as a Deferred Tax Asset because the relevant recognition criteria has not been met.

As of December 31, 2023 and 2022, no deferred tax liability has been recognized on investments in subsidiaries. The Company has concluded it has the ability and intention to control the timing of any distribution from its subsidiaries and it is probable that will be no reversal in the foreseeable future in a way that would result in a charge to taxable profit.
F-37


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



The roll forward of the deferred tax assets/(liabilities) presented in the consolidated financial position is as follows:

2023OpeningRecognized inRecognized Acquisitions/Additions fromClosing
balanceprofit or loss (*)directly in equitydisposalsacquisitionsbalance
Deferred tax assets/(liabilities) in relation to:
Share-based compensation plan13,048 9 1,770   14,827 
Provision for vacation and bonus27,747 7,105 1,144  138 36,134 
Intercompany trade payables17,323 (1,482)   15,841 
Property, equipment, intangibles and leases(32,690)8,957   (5,376)(29,109)
Goodwill(6,100)(2,794)   (8,894)
Allowance for doubtful accounts1,937 2,719    4,656 
Contingencies242 (242)    
Inflation adjustments721 (305)   416 
Other assets(2,989)2,798    (191)
Others2,148 5,508   (198)7,458 
Subtotal21,387 22,273 2,914  (5,436)41,138 
Loss carryforward9,304 330 946 (3,142)2,495 9,933 
TOTAL30,691 22,603 3,860 (3,142)(2,941)51,071 

(*) Includes foreign exchange loss of 10,435.

2022OpeningRecognized inRecognized Acquisitions/Additions fromClosing
balanceprofit or loss (*)directly in equitydisposalsacquisitionsbalance
Deferred tax assets/(liabilities) in relation to:
Share-based compensation plan30,788 20 (17,760)  13,048 
Provision for vacation and bonus24,621 3,205 (79)  27,747 
Intercompany trade payables18,613 (1,290)   17,323 
Property, equipment, intangibles and leases(20,512)(3,170)  (9,008)(32,690)
Goodwill(3,681)(2,419)   (6,100)
Allowance for doubtful accounts1,604 333    1,937 
Contingencies356 (114)   242 
Inflation adjustments2,357 (1,636)   721 
Other assets(1,404)(1,585)   (2,989)
Others1,506 1,277   (635)2,148 
Subtotal54,248 (5,379)(17,839) (9,643)21,387 
Loss carryforward2,867 3,747  (979)3,669 9,304 
TOTAL57,115 (1,632)(17,839)(979)(5,974)30,691 
(*) Includes foreign exchange loss of 2,983.





F-38


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)




9.3 OECD PILLAR TWO MODEL RULES

On December 22, 2023, the Luxembourg Official Gazette published Law A864 to transpose the Council Directive (EU) 2022/2523 of December 15, 2022 aimed at ensuring a minimum level of global taxation for groups of multinational companies and large-scale national groups in the Union. Globant S.A. is incorporated in Luxembourg, the Group is within the scope of the OECD Pillar Two model rules from January 1, 2024. Since the Pillar Two legislation was not effective at the reporting date, the group has no related current tax exposure.

Under the legislation, the Group is liable to pay a top-up tax for the difference between the GloBE effective tax rate per jurisdiction and the 15% minimum rate. The Group is in the process of assessing its exposure to the Pillar Two legislation. This assessment indicates that the jurisdiction Uruguay, has an average effective tax rate based on accounting profit for the annual reporting period to 31 December 2023, below 15%. Other jurisdictions may also have effective tax rate below 15% (calculated in accordance with paragraph 86 of IAS 12) but the group might not be exposed to paying Pillar Two income taxes due to the application of the transitional Safe Harbours provisions and the impact of specific adjustments envisaged in the Pillar Two legislation which give rise to different effective tax rates compared to those calculated in accordance with paragraph 86 of IAS 12.

Due to the complexities in applying the legislation and calculating GloBE income, the quantitative impact of the enacted legislation is not yet reasonably estimable. The group is currently engaged with tax specialists to assist it with applying the legislation.

It is unclear if the Pillar Two model rules create additional temporary differences, whether to remeasure deferred taxes for the Pillar Two model rules and which tax rate to use to measure deferred taxes. In response to this uncertainty, on 23 May 2023 the IASB issued amendments to IAS 12 ‘Income taxes’ introducing a mandatory temporary exception to the requirements of IAS 12 under which a company does not recognise or disclose information about deferred tax assets and liabilities related to the proposed OECD/G20 BEPS Pillar Two model rules. Those amendments were endorsed by the EU Commission on 8 November 2023. The Group applied the temporary exception in the period ended December 31, 2023.

NOTE 10 – EARNINGS PER SHARE
 
The earnings and weighted average number of shares used in the calculation of basic and diluted earnings per share are as follows:
 For the year ended December 31,
 202320222021
Net income for the year attributable to owners of the Company158,538 148,891 96,065 
Weighted average number of shares (in thousands) for the purpose of basic earnings per share42,601 41,929 40,940 
Weighted average number of shares (in thousands) for the purpose of diluted earnings per share43,594 42,855 42,076 
BASIC EARNINGS PER SHARE$3.72 $3.55 $2.35 
DILUTED EARNINGS PER SHARE$3.64 $3.47 $2.28 
 
The following potential ordinary shares are anti-dilutive and are therefore excluded from the weight average number of ordinary shares for the purpose of diluted earnings per share:

For the year ended December 31,
202320222021
Shares not-deemed to be issued in respect of employee options67 25 30 

F-39


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



NOTE 11 – CASH AND CASH EQUIVALENTS
 As of December 31,
20232022
Cash and bank balances298,583 228,632 
Time deposits8,640 63,825 
TOTAL307,223 292,457 

NOTE 12 – INVESTMENTS
12.1 – Investments 
 As of December 31,
20232022
Current
Mutual funds (1)
13,570 47,009 
Commercial Papers (2)
2,500  
Bills issued by the Treasury Department of the U.S. ("T-Bills") (2)
 1,399 
TOTAL16,070 48,408 
     
(1)Measured at fair value through profit or loss.
(2)Measured at fair value through other comprehensive income.
 As of December 31,
20232022
Non current
Contribution to funds (3)
1,833 1,513 
TOTAL1,833 1,513 

(3)On November 30, 2020, the Company signed a contribution agreement with Vistra ITCL and Pentathlon Ventures LLP, through which the Company committed to invest an aggregate amount approximately 2,000, as of December 31, 2023 and 2022, the Company has paid 1,833 and 1,513, respectively.

12.2 – Investments in associates

Because Energy Corp investment

During 2022 the Company paid an aggregate consideration of 500 in exchange for a 20% equity interest in Because Energy Corp. and accounted for this investment using the equity method considering that the Company has significant influence over the operating and governance decisions of Because Energy Corp., given that the Company participates and has influence in the board of director, the approval of budget and business plan, among other decisions.

As of December 31, 2023, the Company has a 20% of interest in Because Energy Corp.

As of December 31, 2023 and 2022 the amount recognized was 560 and 505, respectively.

For the years ended December 31, 2023 and 2022, the Company share on the profit or loss for the investment in Because Energy Corp. was a gain of 55 and a loss of 5, respectively.

Genexus Japan investment

Through the acquisition of Genexus on April 20, 2022, the Company acquired a 28% interest in Genexus Japan.
F-40


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



As of December 31, 2023, the Company had a 28% of interest in Genexus Japan and accounted for this investment using the equity method considering that the Company has significant influence over the operating and governance decisions of Genexus Japan, as the participation in the board of director, the approval of budget and business plan, among other decisions.

As of December 31, 2023 and 2022 the amount recognized was 866 and 832, respectively.

For the years ended December 31, 2023 and 2022, the Company share on the profit or loss for the investment in Genexus Japan was a gain of 34 and a loss of 114, respectively.

Acamica investment

As of December 31, 2020, the Company had a 47.5% of participation in Acámica Tecnologías S.L. The investment is accounted using the equity method considering that the Company has significant influence over the operating and governance decisions of Acamica Tecnologías S.L., as the interest in the board of director, the approval of budget and business plan, among other decisions.

On April 22, 2021, the Company signed a subscription agreement alongside Fitory S.A., Wayra Argentina S.A., Stultum Pecunian Ventures LLC, Eun Young Hwang and Digital House Group Ltd ("Digital House"), pursuant to which the investors agree to sell their participation in Acamica to Digital House in exchange for the allotment and issuance of shares. However prior to the closing, on April 29, 2021, the Company made an additional contribution to Acamica for an amount of 1,095, increasing its participation to 51.9% obtaining temporary control of Acamica. On June 29, 2021, the subscription agreement was closed.

For the year ended December 31, 2021, the Company share on the profit or loss for the investment in Acamica a loss of 233.     

NOTE 13 – TRADE RECEIVABLES
 As of December 31,
 20232022
Current
Accounts receivable (1)
408,166 361,883 
Unbilled revenue111,785 70,141 
Subtotal519,951 432,024 
Less: Allowance for expected credit losses(20,668)(7,214)
TOTAL499,283 424,810 
 
(1)As of December 31, 2023 and 2022, the Company has 266 and 14 as outstanding balances with related parties (see note 24.1).

Allowance for expected credit losses

The following tables detail the risk profile of trade receivables based on the Company's provision matrix as of December 31, 2023 and 2022.

December 31, 2023Trade receivables - days past due
< 3031 - 6061 - 9091-120121-180181 - 365> 365Risk clientsTotal
Expected credit loss rate0.82%2.08%4.81%9.02%26.60%84.13%100.00%100.00%
Estimated total gross carrying amount at default104,024 21,442 7,775 4,856 5,090 5,083 8,283 4,644 161,197 
Lifetime ECL853 446 374 438 1,354 4,276 8,283 4,644 20,668 
F-41


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



December 31, 2022Trade receivables - days past due
< 3031 - 6061 - 9091-120121-180181 - 365> 365Risk clientsTotal
Expected credit loss rate0.49%1.47%3.31%8.90%31.18%82.05%100.00%100.00%
Estimated total gross carrying amount at default65,306 18,367 9,335 4,326 5,301 1,359 859 2,303 107,156 
Lifetime ECL320 270 309 385 1,653 1,115 859 2,303 7,214 

The movements in the allowance are calculated based on lifetime expected credit loss model for 2023 and 2022.

The following table shows the movement in ECL that has been recognized for trade receivables in accordance with the simplified approach:
 As of December 31,
 202320222021
Balance at beginning of year(7,214)(6,177)(5,755)
Additions related to Travel and Hospitality clients  (2,228)
Additions, net (note 4.2)(18,808)(6,364)(5,323)
Write-off of receivables5,354 5,327 7,129 
Balance at end of year(20,668)(7,214)(6,177)
 
The average credit period on sales for 2023 and 2022 is 80 days and 73 days, respectively. No interest is charged on trade receivables, except for certain customers to which financing facilities have been given with the corresponding financing charge. The Company always measures the loss allowance for trade receivables at an amount equal to lifetime ECL. The expected credit losses on trade receivables are estimated using the provision matrix by reference to past default experience of the debtor and an analysis of the debtor's current financial position, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.

NOTE 14 – OTHER RECEIVABLES
 As of December 31,
 20232022
Current  
Prepaid expenses26,934 18,543 
Tax credit - Knowledge Law (note 3.7.1.1)7,354 22,564 
Income tax credits6,956 16,985 
Tax credit - VAT2,124 2,270 
 Advances to suppliers2,094 3,082 
Other tax credits1,815 2,159 
Guarantee deposits61 61 
Other7,448 4,548 
     TOTAL54,786 70,212 
F-42


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



 As of December 31,
20232022
Non-current  
Income tax credits13,210 6,006 
Guarantee deposits7,558 5,942 
Prepaid expenses1,982 816 
Tax credit - VAT1,012 1,622 
Other tax credits306 5,184 
Other2,407 1,571 
TOTAL26,475 21,141 

NOTE 15 – PROPERTY AND EQUIPMENT
 
The Company reviews the estimated useful lives of property and equipment at the end of each reporting period. The Company determined that the useful lives of the assets included as property and equipment are in accordance with their expected lives.

Property and equipment as of December 31, 2023 included the following:
 
 Computer equipment and softwareFurniture and office suppliesOffice fixturesVehiclesBuildingsLandsProperties under constructionTotal
Useful life (years)35
3 - 5
550 
Cost 
Values at beginning of year92,837 16,479 78,210 276 31,505 2,354 59,174 280,835 
Additions related to business combinations (note 26.2)2,213 287 83 350 280  169 3,382 
Additions11,415 1,142 582 33   17,454 30,626 
Derecognition(3,083)(104)(63)(238)   (3,488)
Transfers26 610 25,975  42,649  (69,260) 
Translation83 69 318 8 26  2 506 
Values at end of year103,491 18,483 105,105 429 74,460 2,354 7,539 311,861 
Depreciation       
Accumulated at beginning of year55,361 10,983 50,816 113 1,829   119,102 
Additions18,372 2,419 10,857 148 964   32,760 
Derecognition(2,619)(56)(63)(176)   (2,914)
Translation(39)38 154 6 18   177 
Accumulated at end of year71,075 13,384 61,764 91 2,811   149,125 
Carrying amount32,416 5,099 43,341 338 71,649 2,354 7,539 162,736 
 
F-43


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



Property and equipment as of December 31, 2022 included the following:
 
 Computer equipment and softwareFurniture and office suppliesOffice fixturesVehiclesBuildingsLandsProperties under constructionTotal
Useful life (years)35
3 - 5
550
Cost
Values at beginning of year66,602 14,207 68,302 240 13,971 2,354 62,614 228,290 
Additions related to business combinations (note 26.2)650 147 398 128    1,323 
Additions26,542 2,599 1,269    22,749 53,159 
Disposals(776)(458)(296)    (1,530)
Transfers1 (9)8,667  17,534  (26,193) 
Translation(182)(7)(130)(92)  4 (407)
Values at end of year92,837 16,479 78,210 276 31,505 2,354 59,174 280,835 
Depreciation
Accumulated at beginning of year42,024 8,475 42,915 11 1,492   94,917 
Additions13,899 2,896 8,110 82 337   25,324 
Disposals(746)(397)(286)    (1,429)
Translation184 9 77 20    290 
Accumulated at end of year55,361 10,983 50,816 113 1,829   119,102 
Carrying amount37,476 5,496 27,394 163 29,676 2,354 59,174 161,733 

NOTE 16 – INTANGIBLE ASSETS

The Company reviews the estimated useful lives of intangible assets at the end of each reporting period. The Company determined that the useful lives of the assets included as intangible assets are in accordance with their expected lives.

If any impairment indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). The recoverable amount is the higher of fair value less costs of disposal and value in use. The discount rate use is the appropriate weighted average cost of capital.

During the year, the Company considered the recoverability of its internally generated intangible asset which are included in the consolidated financial statements as of December 31, 2023 and 2022 with a carrying amount of 74,653 and 43,170, respectively.

As of December 31, 2023 and 2022 no impairment were recognized.

F-44


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



Intangible assets as of December 31, 2023 included the following: 

 Licenses and internal developmentsCustomer relationships and contracts PlatformsNon-compete agreementsCryptocurrencies(*)Total
Useful life (years)
3 - 5
1 - 9
4 - 8
3
 
Cost 
Values at beginning of year145,301 127,583 33,370 2,414 2,047 310,715 
Additions related to business combinations (note 26.2)38 36,028  734  36,800 
Additions from separate acquisitions14,639    149 14,788 
Additions from internal development65,050     65,050 
Derecognition(3,255)   (288)(3,543)
Translation516 3,446 (273)36  3,725 
Values at end of year222,289 167,057 33,097 3,184 1,908 427,535 
Amortization and impairment
Accumulated at beginning of year85,278 39,992 419 1,357 1,097 128,143 
Additions41,218 18,360 7,044 497  67,119 
(Reversal) Impairment loss recognized in profit or loss     (822)(822)
Derecognition(2,983)    (2,983)
Translation60 620 (131)(11) 538 
Accumulated at end of year123,573 58,972 7,332 1,843 275 191,995 
Carrying amount98,716 108,085 25,765 1,341 1,633 235,540 
 
(*) As of December 31, 2023, the Company´s crypto assets are comprised by Bitcoin, Ethereum and Stable Coin.
F-45


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



Intangible assets as of December 31, 2022 included the following: 
 Licenses and internal developmentsCustomer relationships and contractsPlatformsNon-compete agreementsCryptocurrencies (*)Total
Useful life (years)
3 - 5
1 - 9
4 - 8
3
 
Cost 
Values at beginning of year99,036 85,807  1,990 1,216 188,049 
Additions related to business combinations (note 26.2)6,730 42,762 33,370 353  83,215 
Additions from separate acquisitions8,844   131 843 9,818 
Additions from internal development36,871     36,871 
Derecognition(6,170)   (12)(6,182)
Translation(10)(986) (60) (1,056)
Values at end of year145,301 127,583 33,370 2,414 2,047 310,715 
Amortization and impairment   
Accumulated at beginning of year56,460 28,552  941 80 86,033 
Additions33,521 12,945 419 480  47,365 
Impairment loss recognized in profit or loss    1,017 1,017 
Disposals(4,651)    (4,651)
Translation(52)(1,505) (64) (1,621)
Accumulated at end of year85,278 39,992 419 1,357 1,097 128,143 
Carrying amount60,023 87,591 32,951 1,057 950 182,572 
(*) As of December 31, 2022, the Company´s crypto assets are comprised by Bitcoin, Ethereum and Stable Coin.

NOTE 17 – OTHER ASSETS
 
The Company has resale agreements with customers, among which some contracts consist on billing customers and receiving invoices from suppliers based on a billing schedule established in the subscription and other resales contracts. Therefore, the outstanding balance of other assets includes the right to consideration related to subscriptions and other resales that have not yet been invoiced by the Company, and trade payables includes the accrual of expenses for the cost that has not yet been invoiced by the suppliers.

The outstanding balance of other assets as of December 31, 2023 and 2022 is as follows:
As of December 31,
20232022
Current
Unbilled Subscriptions22,685 15,197 
Other resales contracts9,068  
TOTAL31,75315,197
Non-current
Unbilled Subscriptions 4,088 10,657 
TOTAL4,08810,657

F-46


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



NOTE 18 – OTHER FINANCIAL ASSETS AND LIABILITIES

As of December 31,
20232022
Other financial assets
Current
Foreign exchange forward contracts10,4083,509
Convertible notes3,3592,491
Interest rate SWAP852 155 
Equity instruments611 371 
Equity forward contract 188  
Others 3 
TOTAL15,4186,529
Non-current
Equity instruments28,74327,521 
Convertible notes5,7514,193
Equity forward contract370  
Interest rate SWAP 3,261 
Others 3 
TOTAL34,86434,978
Other financial liabilities
Current
Other financial liabilities related to business combinations (note 26) (1)
67,76650,889
Put option on minority interest of GUT13,006 — 
Equity forward contract393981
Foreign exchange forward contracts3113,575 
Put option on minority interest of Walmeric— 3,871 
Others28  
TOTAL81,50459,316
Non-current
Other financial liabilities related to business combinations (note 26) 99,73769,635
Put option on minority interest of GUT62,807 — 
Equity forward contract774 2,905 
Put option on minority interest of Walmeric— 5,515 
TOTAL163,31878,055

(1) As part of the acquisition of Grupo ASSA and Pentalog, the sellers agreed to indemnify the Company for the outcome of certain contingencies. As a result, the Company has recognized an indemnification asset for a total amount of 10,067 and 6,071, as of December 31, 2023 and 2022, respectively. The consideration for these acquisitions includes 19,664 and 9,398 as of December 31, 2023 and 2022, respectively which is subject to adjustments, deductions and withholdings related to the indemnified contingencies. Consequently, the Company has off-set the indemnification asset against the amount payable to the sellers.




F-47


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



18.1 Equity Instruments

Digital House investment

On December 31, 2020, Globant España S.A. entered into a share purchase agreement along side other two partners to acquire between the three of them 614,251 shares of Digital House Group Ltd, which 204,750 correspond to Globant España S.A, such amount was acquired for 9,167. On April 22, 2021, the Company entered into a subscription agreement pursuant to which the investors sell their participation in Acamica in exchange for an increase in Digital House's investment for 5,848. On September 30, 2021, the Company paid an additional 862. On July 7, 2022, the Company paid an additional 4,148, increasing it's investment to 17.2%. As of December 31, 2023, the Company has a 17.2% equity interest on Digital House, and the amount disclosed is 20,502 as other financial assets non-current.

As of December 31, 2023,and 2022 the Company recognized a loss of 2,372 and a gain 2,850, respectively, included in the line item "Net change in fair value on financial assets measured at FVOCI".

ELSA investment

On January 15, 2021, Globant España, signed a stock purchase agreement and acquired 4% of ELSA, Corp., for 2,700.On June 21, 2023, the Company paid and additional 1,130, increasing it's investment to 4.3%

As of December 31, 2023, and 2022 the Company recognized a gain of 2,640 and a loss of 2,047, respectively included in the line item "Net change in fair value on financial assets measured at FVOCI"

V.U investment

On April, 23, 2021, Globant España, signed a stock purchase agreement and acquired 3% of VU Inc., for 2,200.On September 18, 2023, the Company paid additional 618, increasing it´s investment to 3.1%.

As of December 31, 2023, the Company recognized a loss of 220 included in the line item "Net change in fair value on financial assets measured at FVOCI"

Singularity investment

On July 8, 2019 ("issuance date"), Globant España S.A. and Singularity Education Group, agreed into a note purchase agreement whereby Globant España S.A. provides financing facility for 1,250. Interest on the entire outstanding principal balance is computed at an annual rate of 5%. Singularity Education Group shall repay the loan in full within 1 year from the effective date. Globant España S.A has the right to convert any portion of the outstanding principal into Conversion Shares of Singularity Education Group.

On August 27, 2020 Globant España S.A decided to convert all the outstanding principal into shares as mentioned in the previous note purchase agreement, Singularity Education Group issued through purchase conversion 10,655,788 shares at $0.1231 per share for a total amount of 1,311, such amount is disclosed as other financial asset non-current.

As of December 31, 2022, the Company recognized a loss of 555 included in the line item "Net change in fair value on financial assets measured at FVOCI". As of December 31, 2023, the Company did not recognize any remeasurement in other comprehensive income.

Queiban investment

On September 12, 2022, Globant España S.A. signed a stock purchase agreement and acquired 3.77% of Queiban S.A. for 1,000.

As of December 31, 2023, the Company recognized a loss of 576 included in the line item "Net change in fair value on financial assets measured at FVOCI".

F-48


GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)



Latam Airlines investment

In connection with Latam Airlines Group S.A.'s Chapter 11 reorganization plan filed before the United States Bankruptcy Court for the Southern District of New York, the Company received convertible bonds which, on December 23, 2022, were converted into less than 1% of shares of Latam Airlines Group S.A. for 371.

As of December 31, 2023, the Company recognized a gain of 249 included in the line item "Net change in fair value on financial assets measured at FVOCI".

NOTE 19 – TRADE PAYABLES

 As of December 31,
20232022
Current
Expenses accrual68,015 50,114 
Suppliers (1)
48,481 35,754 
Advanced payments from customers8,049 3,529 
TOTAL124,545 89,397 

(1)As of December 31, 2023 and 2022, the Company has 177 and 574 as outstanding balances with related parties (see note 24.1).

As of December 31,
20232022
Non current
Expenses accrual2,981 5,445 
TOTAL 2,981 5,445 

NOTE 20 – PAYROLL AND SOCIAL SECURITY TAXES PAYABLE  
 As of December 31,
 20232022
Current
Provision for vacation, bonus and others170,010 148,874 
Social security tax41,763 37,716 
Salaries7,774 15,592 
Cash-settled scheme1,709 1,343 
Directors fees120 187 
Other467 107 
TOTAL221,843 203,819 
As of December 31,
20232022
Non current
Provision for vacation, bonus and others3,192 2,776 
Cash-settled scheme1,947 1,540 
TOTAL5,139 4,316 



F-49

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

NOTE 21 – BORROWINGS  
 
The principal balances of outstanding borrowings under lines of credit with banks and financial institutions were as follows:
As of December 31,
20232022
HSBC Bank - Syndicated loan (United States)155,980  
BPIfrance Financement (France)
3,079  
Liga Nacional de Fútbol Profesional (Spain) 1,938 
Centro para el Desarrollo Tecnológico Industrial (Spain) 894 
BBVA (Mexico) 760 
Banco Desio (Italia) 15 
Others48 92 
TOTAL159,107 3,699 

Such balances were included as current and non-current borrowings in the consolidated statement of financial position as follows:
 As of December 31,
 20232022
Current
Bank loans156,914 812 
Other loans2 2,026 
Sub-Total156,916 2,838 
Non-current
Bank loans2,191 55 
Other loans 806 
Sub-Total2,191 861 
TOTAL159,107 3,699 

On November 1, 2018, Globant, LLC, the Company's U.S. subsidiary, entered into an Amended and Restated ("A&R") Credit Agreement by and among certain financial institutions, as lenders, and HSBC Bank USA, National Association, as administrative agent, issuing bank and swingline lender. The A&R Credit Agreement amended and restated the Credit Agreement dated as of August 3, 2017. Under the A&R Credit Agreement, Globant, LLC could have borrowed (i) up to 50,000 in a single borrowing on or prior to May 1, 2019 under a delayed-draw term loan facility and (ii) up to 150,000 under a revolving credit facility. In addition, Globant, LLC could have requested increases of the maximum amount available under the revolving facility in an aggregate amount not to exceed 100,000. The maturity date of the facilities was October 31, 2023. Pursuant to the terms of the A&R Credit Agreement, interest on loans extended thereunder shall accrue at a rate per annum equal to London Interbank Offered Rate ("LIBOR") plus 1.75%. Globant, LLC’s obligations under the A&R Credit Agreement were guaranteed by the Company and its subsidiary Globant España S.A., and are secured by substantially all of Globant, LLC’s now owned and after-acquired assets. The A&R Credit Agreement contained certain customary negative and affirmative covenants.

On February 6, 2020, Globant, LLC, our US subsidiary (the "Borrower"), entered into a Second Amended and Restated Credit Agreement (the “Second A&R Credit Agreement”), by and among certain financial institutions listed therein, as lenders, and HSBC Bank USA, National Association, as administrative agent, issuing bank and swingline lender. Under the Second A&R Credit Agreement, which amends and restates the existing A&R Credit Agreement dated as of November 1, 2018, the Borrower may borrow (i) up to $100 million in up to four borrowings on or prior to August 6, 2021 under a delayed-draw term loan facility and (ii) up to $250 million under a revolving credit facility. In addition, the Borrower may request increases of the maximum amount available under the revolving facility in an aggregate amount not to exceed $100 million. The maturity date of each of the facilities is February 5, 2025. Pursuant to the terms of the Second A&R Credit Agreement, interest on the loans extended thereunder shall accrue at a rate per annum equal to either (i) LIBOR plus 1.50%, or (ii) LIBOR plus 1.75%, determined based on the Borrower’s Maximum Total Leverage Ratio (as defined in the Second A&R Credit Agreement). The
F-50

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

Borrower’s obligations under the Second A&R Credit Agreement are guaranteed by the Company and its subsidiary Globant España S.A., and are secured by substantially all of the Borrower’s now owned and after-acquired assets. The Seconds A&R Credit Agreement principally contains the following covenants: delivery of certain financial information; payment of obligations, including tax liabilities; use of proceeds only for transaction costs payments, for lawful general corporate purposes and working capital; Globant, LLC's Fixed Charge Coverage Ratio shall not be less than 1.25 to 1.00; Globant, LLC's Maximum Total Leverage Ratio shall not exceed 3.00 to 1.00; Globant, LLC or any of its subsidiaries shall not incur in any indebtedness, except for the ones detailed in the agreement; Globant, LLC or any of its subsidiaries shall not assume any Lien; advances to officers, directors and employees of the Borrower and Subsidiaries in an aggregate amount not to exceed 50 outstanding at any time; restricted payments not to exceed 10,000 per year; Globant, LLC shall not maintain intercompany payables owed to any of its Argentina Affiliates except to the extent (i) such payables are originated in transactions made in the ordinary course of business and (ii) the aggregate amount of such payables do not exceed an amount equal to five times the average monthly amount of such Affiliates’ billings for the immediately preceding 12 month period; Globant, LLC's capital expenditures limited to 10% the Company's consolidated net revenue per year and Globant, LLC's annual revenue is to remain at no less than 60% of the Company's consolidated annual revenue; among others.

On June 2, 2022 the Company signed an amendment and restated the credit agreement with HSBC, pursuant to which the LIBOR rate was replaced by a Secured Overnight Financing Rate ("SOFR") plus 0.10%.

On May 31, 2023, Globant, LLC (the “Borrower”), the U.S. subsidiary of the Company, entered into a Fourth Amended and Restated Credit Agreement (the “Credit Agreement”) with HSBC Bank USA, N.A. as administrative agent, issuing bank and swingline lender and certain financial institutions listed therein as lenders.Under the Credit Agreement, the Borrower may borrow up to $725 million under a revolving credit facility. In addition, the Borrower may request increases of the maximum amount available under the revolving facility, and may request term loan tranches, in an aggregate amount not to exceed $350 million plus additional amounts, so long as the Maximum Net Leverage Ratio (as defined in the Credit Agreement) does not exceed 3.00 to 1.00 after giving effect thereto. The maturity date of each loan is May 30, 2028. Interest on the loans will accrue at a rate per annum equal to either (i) SOFR plus 0.10% plus between 1.25% and 1.875%, or (ii) the Alternate Base Rate (as defined in the Credit Agreement) plus between 0.25% and 0.875%, at the option of the Borrower. Undrawn commitment under the revolving credit facility are subject to a commitment fee at a rate per annum of 0.15% to 0.25%. The applicable margin and the commitment fee rate will be determined quarterly based upon the Maximum Net Leverage Ratio. The Borrower’s obligations under the Credit Agreement are guaranteed by the Company, its subsidiary, Globant España S.A., and the Borrower’s subsidiary Globant IT Services Corp. (the “Subsidiary Guarantor”), and are secured by substantially all of the Borrower’s and the Subsidiary Guarantor’s now owned and after-acquired assets. The Credit Agreement also contains certain customary negative and affirmative covenants, which compliance may limit the flexibility of the Company in operating its business and its ability to take actions that might be advantageous to the Company and its shareholders. The Borrower is required to comply with two financial maintenance covenants, which are tested quarterly: (i) a minimum interest coverage ratio of 3.00 to 1.00 and (ii) a Maximum Net Leverage Ratio of 3.50 to 1.00.

Movements in borrowings are analyzed as follows:
 As of December 31,
 202320222021
Balance at the beginning of year3,699 12,240 25,968 
Borrowings related to business combination (note 26.2) (1) (4)
30,695 3,010 2,538 
Proceeds from new borrowings (2) (5)
395,621  13,500 
Payment of borrowings (3) (5)
(275,889)(10,760)(30,216)
Accrued interest (4)
4,106 2,491 915 
Foreign exchange (4)
 (3,127)(375)
Translation (4)
875 (155)(90)
TOTAL159,107 3,699 12,240 

(1) Relates to a line of credit granted by J.P.Morgan Chase & Co in USD to Experience IT and lines of credit granted by BPIfrance Financement and BNP Paribas in EUR to Pentalog with maturities between December 2026 and May 2028; and a loan granted by Python Midco S.a.r.l on December 10, 2020. As of December 31, 2023, these borrowings do not have any covenants.

F-51

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

(2)    During the year ended December 31, 2023, Globant LLC borrowed 395,000, under the Amended and Restated Credit Agreement with HSBC Bank USA, this loan will mature on May 30, 2028; according to the conditions agreed in the Fourth Amended and Restated Credit Credit Agreement on May 31, 2023.

(3) During the year ended December 31, 2023, the main payments were 243,344 by Globant LLC related to the principal amount and interests of the Amended and Restated Credit Agreement with HSBC Bank USA, 18,359 by Globant España related to the principal and interests of the loan owed by Python Bidco to Python Midco S.a.r.l, 6,225 by Pentalog related to the remaining principal amount and interest of BNP Paribas, 2,588 by Experience IT related to the remaining principal amount and interest of J.P.Morgan Chase & Co and 1,969 by Sports Reinvention Entertainment Group S.L to Liga Nacional de Fútbol Profesional related to the principal amount and interests. During the year ended December 31, 2022 , the main payments were 9,030 by Sistemas Globales, S.A to Banco Santander related to the principal amount and interests, and Hybrido Worldwide S.L. paid 808 related to the remaining principal amount and interests of the Banco Santander loan between January 3rd and May 23.

(4) Non-cash transactions.

(5) Cash transactions.

NOTE 22 – TAX LIABILITIES  
 As of December 31,
 20232022
Current
VAT payable22,262 16,213 
Supplier withholding income taxes5,461 951 
Sales taxes payable1,645 560 
Personal properties tax accrual1,308 1,177 
Wage withholding taxes213 2,504 
Taxes payable related to Argentine Knowledge Economic Law163 730 
Other2,177 1,319 
TOTAL33,229 23,454 

NOTE 23 – CONTINGENT LIABILITIES
 
The Company is subject to legal proceedings and claims which arise in the ordinary course of its business. The Company records a provision for labor, regulatory and commercial claims where the risk of loss is considered probable. The final resolution of these potential claims is not likely to have a material effect on the results of operations, cash flow or the financial position of the Company.

Breakdown of reserves for lawsuits claims and other disputed matters include the following: 
 As of December 31,
 20232022
Reserve for labor claims114 185 
Reserve for regulatory claims16,334 13,430 
TOTAL16,448 13,615 










F-52

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

Roll forward is as follows: 
 As of December 31,
Reserve for labor claims202320222021
Balance at beginning of year185 5 53 
Additions293 370 8 
Recovery(94)(1)(10)
Utilization of provision for contingencies (216)(89)(38)
Foreign exchange(54)(100)(8)
Balance at end of year114 185 5 

 As of December 31,
Reserve for regulatory claims202320222021
Balance at beginning of year13,430 9,632 10,130 
Additions (1)
923 4,260 863 
Additions related to business combinations 4,159 569  
Recovery(1,987)(270)(258)
Utilization of provision for contingencies (2)
(1,028)(961)(509)
Foreign exchange837 200 (594)
Balance at end of year 16,334 13,430 9,632 

 As of December 31,
Reserve for commercial claims202320222021
Balance at beginning of year  2,400 
Additions (3)
 700 5,166 
Utilization of provision for contingencies (4)
 (700)(7,566)
Balance at end of year   

(1) Between 2010 and 2014, certain of Grupo Assa’s Brazilian subsidiaries were subject to two examinations by the Ministry of Labor (“MTE”) and the Brazilian Internal Revenue Service (“RFB”) in relation to the potential hiring of employees as independent contractors. As a result of such examinations, Grupo Assa’s Brazilian subsidiaries are subject to different administrative and judicial proceedings, seeking to collect payment of taxes and social security contributions allegedly owed by the companies, and impose certain associated fines. As of December 31, 2023, some of these administrative proceedings are still ongoing while others have resulted in judicial proceedings. The recognized liability as of December 31, 2023 and 2022 was 11,477 and 10,858, respectively. Under the Equity Purchase Agreement entered into for the acquisition of Grupo ASSA Worldwide S.A. and its affiliates (collectively “Grupo Assa”), certain of the above-mentioned proceedings are subject to indemnification provisions from the sellers for the total amount of 6,690 and 6,071 as of December 31, 2023 and 2022, respectively, accounted for in Other Financial Liabilities line, net. The effect of the increase of this regulatory claim was fully offset with the indemnification provision.

(2) In 2018, certain of our non-U.S. subsidiaries had been under examination by the U.S. Internal Revenue Service ("IRS") regarding payroll and employment taxes primarily in connection with services performed by employees of certain of our subsidiaries in the United States between 2013 and 2015. During the fourth quarter of 2021, the IRS and our subsidiaries reached a preliminary agreement on the proposed assessments which would amount to 1,300 including applicable interests and penalties. The Company paid 961 related to the principal amount on March 16, 2022, and is waiting for final confirmation on the amounts of the applicable interests and penalties to settle this matter definitely.

(3) On August 8, 2019, Certified Collectibles Group, LLC (“CCG”) and its affiliates filed a complaint in the U.S. District Court for the Middle District of Florida, Tampa Division, (Civil Action No. 19-CV-1962) against Globant S.A. and Globant, LLC, arising from a dispute relating to a service contract. After several discussions, on July 30, 2021, the parties filed a notice of settlement with the court. The claim was settled in 7,250 (of which 2,700 were covered by insurance reimbursement).

(4) On September 15, 2021, the Company made the first of two installment payments related to the settlement with Certified Collectibles Group, LLC. On November 30, 2021 the second installment was paid leaving the liability fully settled.


F-53

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

NOTE 24 – RELATED PARTIES BALANCES AND TRANSACTIONS

24.1 – Related parties
 
The Company provides software and consultancy services to certain related parties. Outstanding receivable balances as of December 31, 2023 and 2022 are as follows:
As of December 31,
Trade receivables20232022
Enigma.art LLC266 14 
TOTAL266 14 

As of December 31,
Trade payables20232022
Falcon Uru LLC(177)(574)
TOTAL(177)(574)

During the year ended December 31, 2023, 2022 and 2021, the Company recognized the Company recognized the following transactions:
 For the year ended December 31,
 202320222021
Revenue
Enigma.art LLC429 915  
Studio Eter LLC 190  
TOTAL429 1,105  

 For the year ended December 31,
 202320222021
Costs of revenues and Selling, general and administrative expenses
Falcon Uru LLC(994)(780) 
Enigma.art LLC (75) 
TOTAL(994)(855)—  

24.2 – Compensation of key management personnel
 
The remuneration of members of key management personnel during each of the three years are as follows:

 
 For the year ended December 31,
 202320222021
Salaries and bonuses6,9726,7686,709
TOTAL6,9726,7686,709
 
The remuneration of directors and key executives is determined by the Board of Directors based on the performance of individuals and market trends.

During 2021, the Company granted 55,500, 5,000, 1,564, 540, 702 and 468 restricted stock units at a grant price of $298.47, $297.49, $267.19, $232.11, $213.57 and $328.96, respectively.

F-54

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

During 2022, the Company granted 292, 2,220, 300, 78,317 and 324,380 restricted stock units at grant prices of $226, $210, $167, $219 and $138.00, respectively.

During 2023, the Company granted 6,500, 106,950, 6, 87 and 571 restricted stock units at a grant price of $148.96, $148.97, $157.4, $173.26 and $194.54, respectively.

NOTE 25 EMPLOYEE BENEFITS

25.1 – Share-based compensation plan
 
In July 2014, the Company adopted a new Equity Incentive Program, the 2014 Plan, which was amended on May 9, 2016, February 13, 2019, May 18, 2021 and June 8, 2022.

Pursuant to this plan, on July 18, 2014, the first trading day of the Company common shares on the NYSE, the Company made the annual grants for 2014 Plan to certain of the executive officers and other employees. The grants included share options with a vesting period of 4 years, becoming exercisable a 25% of the options on each anniversary of the grant date through the fourth anniversary of the grant. Share-based compensation expense for awards of equity instruments is determined based on the fair value of the awards at the grant date.  

Each employee share option converts into one ordinary share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry (ten years after the effective date).

Share-based compensation expense for awards of equity instruments to employees and non-employee directors is determined based on the grant-date fair value of the awards. Fair value is calculated using Black & Scholes model.

In addition, on December 1, 2021, our compensation committee, as administrator, approved the granting of awards in the form of Stock-Equivalent Units to be settled in cash or common shares ("SEUs Plan"), or a combination thereof, under the 2014 Equity Incentive Plan. The purpose of the SEUs Plan is to provide an incentive to attract, retain and reward talent in the IT industry and to prompt such persons to contribute to the growth and profitability of the Company. The SEUs Plan provides all eligible employees the opportunity of receiving a grant of SEUs with a unit value equal to the market value of one common share of the Company. The SEUs will be settled in cash or common shares of the Company, at the option of the eligible employee, and shall vest during a four years period, in four equal annual installments of 25% each, commencing on the first anniversary of the grant date, 60% of the shares will be tied to retention and 40% will be tied to performance (PSEUs). As of December 31, 2022, the Company have granted 61,072 SEUs and PSEUs, 28,059 and 57,779 were outstanding as of December 31, 2023 and 2022, respectively, net of any cancelled and/or forfeited awards. Of the stock-equivalent units granted, 50% were in the form of PSEUs and 50% were in the form of SEUs.

During the years 2023 and 2022, as part of the 2014 Equity Incentive Plan, the Company granted awards to certain employees in the form of Restricted Stock Units ("RSUs"), having a par value of $1.20 each, with a specific period of vesting. Each RSU is equivalent in value to one share of the company´s common stock and represents the Company´s commitment to issue one share of the Company's common stock at a future date, subject to the term of the RSU agreement.

Until the RSUs vest, they are an unfunded promise to issue shares of stock to the recipient at some point in the future. The RSUs carry neither rights to dividends nor voting rights. RSU's vesting is subject to the condition that the employee must remain in such condition as of the vesting date.

The Company may determine a percentage of RSU, as part of the full year compensation package payment.

These RSUs agreements have been recorded as Equity Settled transactions in accordance to IFRS 2, and they were measured at fair value of shares at the grant date.





F-55

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

The following shows the evolution of the share options for the years ended at December 31, 2023 and 2022:
 
 As of December 31, 2023As of December 31, 2022
 Number of optionsWeighted average exercise priceNumber of optionsWeighted average exercise price
Balance at the beginning of year546,827 30.91 643,957 31.79 
Forfeited during the year(500)32.36 (2,750)22.20 
Exercised during the year(145,630)28.18 (94,380)37.17 
Balance at end of year400,697 31.36 546,827 30.91 
 
The following shows the evolution of the RSUs for the years ended at December 31, 2023 and 2022:

 As of December 31, 2023As of December 31, 2022
 Number of RSUWeighted average grant priceNumber of RSUWeighted average grant price
Balance at the beginning of year1,089,727 166.04 579,492 164.73 
RSU granted during the year378,323 169.61 801,041 159.12 
Forfeited during the year(45,935)201.71 (24,506)178.34 
Issued during the year(257,079)167.22 (266,300)122.29 
Balance at end of year1,165,036 165.42 1,089,727 166.04 

The following shows the evolution of the SEUs for the years ended at December 31, 2023 and 2022:

As of December 31, 2023As of December 31, 2022
Number of SEUWeighted Average Fair ValueNumber of SEUWeighted Average Fair Value
Balance at the beginning of year57,779 168.16   
SEU granted during the year  61,072 168.16 
Forfeited during the year(19,796)190.43 (3,293)168.16 
Issued during the period(9,924)190.43   
Balance at end of year28,059 237.98 57,779 168.16 

















F-56

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

The following tables summarizes the RSU at the end of the year:

Grant dateGrant price ($)Number of Restricted Stock UnitsFair value at grant date ($)Expense as of December 31, 2023 ($) (*)
2019
from 52.10 to 103.75
1,750  533 
2020
from 130.99 to 189.53
53,040 7,863 4,630 
2021
from 200.61 to 298.47
70,580 20,150 8,886 
2022
from 138.00 to 265.96
713,149 107,517 23,070 
2023
from 137.78 to 233.10
317,853 54,174 13,903 
Subtotal1,156,372 189,704 51,022 
Non employees RSU
2020
from 130.99 to 189.53
775 123 63 
2021
232.11
1,500 348 124 
2022
from 186.83 to 265.96
1,350 296 370 
2023
from 166.37 to 235.62
5,039 1,025 302 
Subtotal8,664 1,792 859 
TOTAL1,165,036 191,496 51,881 

The following tables summarizes the share options at the end of the year:

Grant dateExercise price ($)Number of stock optionsNumber of stock options vested as of December 31, 2023Fair value at grant date ($)Fair value vested ($)Expense as of December 31, 2023 ($) (*)
2014
10.00
43,921 43,921 149 149 156 
2015
from 28.31 to 34.20
77,653 77,653 540 540 276 
2016
from 29.01 to 32.36
201,623 201,623 1,543 1,543 708 
2017
36.30
     
2018
from 44.97 to 55.07
77,500 77,500 1,570 1,570 276 
2019
52.10
     
TOTAL400,697 400,697 3,802 3,802 1,416 
 
(*) Includes social security taxes.



F-57

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

Deferred income tax asset arising from the recognition of the share-based compensation plan amounted to 14,827 and 13,048 for the years ended December 31, 2023 and 2022, respectively.

The following tables summarizes the SEU at the end of the year:

Grant dateGrant price ($)Number of Restricted Phantom Stock UnitsFair value at grant date ($)Expense as of December 31, 2023 ($) (*)
2022268.0515,367 4,139 1,038 
2022210.071,362 288 94 
2022181.28,577 1,557 779 
2022169.782,753 466 411 
TOTAL28,059 6,450 2,322 

(*) Includes social security taxes.

25.2 - Share options exercised, RSU and SEU vested during the year: 

 As of December 31, 2023As of December 31, 2022
 Number of options exercisedExercise priceNumber of options exercisedExercise
 price
Granted in 20182,500 55.07 2,500 55.07 
Granted in 20192,000 52.10  52.10 
Granted in 201810,000 46.00 20,750 46.00 
Granted in 20185,000 44.97  44.97 
Granted in 2016 39.37 27,000 39.37 
Granted in 20177,500 36.30  36.30 
Granted in 201645,510 32.36 33,920 32.36 
Granted in 2015256 29.34  29.34 
Granted in 2016834 29.01  29.01 
Granted in 201548,713 28.31 8,385 28.31 
Granted in 201423,317 10.00 1,825 10.00 
Balance at end of the year145,630  94,380  
 
The average market price of the share amounted to 179.89 and 209.95 for years 2023 and 2022, respectively.













F-58

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

The following tables summarizes the RSU vested during the years 2023 and 2022:

December 31, 2023December 31, 2022
Number of RSUs vestedGrant priceNumber of RSUs vestedGrant price
Granted in 2021 328.96 468 328.96 
Granted in 202116,300 298.47 16,375 298.47 
Granted in 20211,500 297.49 1,500 297.49 
Granted in 2021155 288.64 323 288.64 
Granted in 2022 268.31189 268.31
Granted in 202110,771 267.19 12,608 267.19 
Granted in 20221,883 265.96 265.96
Granted in 20213,750 232.11 5,315 232.11 
Granted in 20224,487 226.30 1,662 226.30
Granted in 2022197 225.30 196 225.30 
Granted in 202219,993 219.34 2,585 219.34 
Granted in 202212 218.5720 218.57
Granted in 2021 213.57 2,607 213.57 
Granted in 202212,754 210.07 210.07
Granted in 20222,438 204.08 204.08
Granted in 20214,979 200.61  200.61 
Granted in 2022780 192.94  192.94 
Granted in 202015,917 189.53 15,998 189.53 
Granted in 2022804 186.83 186.83
Granted in 2020250 184.72 250 184.72 
Granted in 2022139 184.01 184.01
Granted in 2021 184.00 1,077 184.00 
Granted in 20206,385 180.60 15,504 180.60 
Granted in 20221,313 173.67 173.67
Granted in 20233,731 173.26 173.26
Granted in 2023441 171.78 171.78
Granted in 20221,416 169.78  169.78 
Granted in 2022813 167.46655 167.46
Granted in 2023120 165.90  165.90 
Granted in 2023130 160.71 160.71
Granted in 202341,180 157.40 157.40
Granted in 20233,152 148.97 148.97
Granted in 2023484 146.28 146.28
Granted in 202326 137.78  137.78 
Granted in 20203,125 137.57 3,125 137.57 
Granted in 202038,555 130.99 38,809 130.99 
Granted in 2019500 103.75 750 103.75 
Granted in 20191,000 94.93 1,000 94.93 
Granted in 201956,999 87.44 61,992 87.44 
Granted in 2018 55.07 1,000 55.07 
Granted in 2018 52.74 1,000 52.74 
Granted in 2019600 52.10 600 52.10 
Granted in 2018 50.92 2,500 50.92 
Granted in 2018 46.00 78,192 46.00 
Balance at end of the year257,079 266,300 

F-59

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

The following tables summarizes the SEU vested during the years 2023 and 2022:

As of December 31, 2023
Number of SEU's vestedExercise price
Granted in 2022 (*)
9,005 186.75 
Granted in 2022 (*)
919 226.50 
Balance at end of the year9,924 

(*) In 2022 no SEU's were vested.

25.3 - Fair value of share-based compensation granted
 
Determining the fair value of the stock-based awards at the grant date requires judgment. The Company calculated the fair value of each option award on the grant date using the Black-Scholes option pricing model. The Black-Scholes model requires the input of highly subjective assumptions, including the fair value of the Company's shares, expected volatility, expected term, risk-free interest rate and dividend yield.
 
The Company estimated the following assumptions for the calculation of the fair value of the share options:
AssumptionsGranted in
2019 for 2014 plan
Stock price52.10
Expected option life
6 years
Volatility40%
Risk-free interest rate3.10%

There were no granted stock options as of December 31, 2023 and 2022.

The Company's grants under its share-based compensation plan with employees are measured based on fair value of the Company's shares at the grant date and recognized as compensation expense on a straight-line basis over the requisite service period, with a corresponding impact reflected in additional paid-in capital.

The Company calculated the fair value of each option award on the grant date using the Black-Scholes option pricing model. The Black-Scholes model requires the input of highly subjective assumptions, including the fair value of the Company's shares, expected volatility, expected term, risk-free interest rate and dividend yield.

Fair value of the shares: For 2014 Equity Incentive Plan, the fair value of the shares is based on the quote market price of the Company's shares at the grant date.

Expected volatility:The expected volatility of the Company's shares is calculated by using the average share price volatility of the Company since January 1, 2016 to the date of grant.

Expected term: The expected life of options represents the period of time the granted options are expected to be outstanding.

Risk free rate: The risk-free rate for periods within the contractual life of the option is based on the U.S. Federal Treasury yield curve with maturities similar to the expected term of the options.

Dividend yield: The Company has never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, the Company used an expected dividend yield of zero.



F-60

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

25.4 - Equity-settled share-based payments under 2014 Equity Incentive Plan and 2021 Employee Share Purchase Plan

During the twelve months ended December 31, 2022, the Company granted a total of 199,825 awards under the Company's 2014 Equity Incentive Plan, net of cancelled and forfeited awards. Most of these awards were comprised of 50% RSUs and 50% PRSUs. RSUs and PRSUs have generally been granted with a vesting period of four years, 25% becoming vested on or about each anniversary of the grant date. In addition, on August 1, 2022, the Company approved the grant of up to 600,000 additional awards under the Company's 2014 Equity Incentive Plan, 50% of which are PRSUs and 50% of which are RSUs. These additional awards will vest based on the achievement of a certain minimum average closing price of the Company's common shares on or prior to August 11, 2030. The threshold price for vesting will be $420 per share through August 10, 2025 and increase by $42 each year until August 11, 2030.

On June 29, 2023, the Company approved to amend the special condition awards granted in August 2022, to the effect of reducing the threshold minimum average closing price for vesting from $420 to $350 per share through (but excluding) June 29, 2026, and increasing it by $35 per share per year until August 11, 2030 and June 29, 2031 for US and non-US residents, respectively. These awards will vest in two equal tranches occurring the first one immediately after the date in which the vesting condition is satisfied and the second occurring on the first anniversary of such vesting event. As of December 31, 2022, the Company granted 597,521 of these awards. As of December 31, 2023, the Company has not granted new RSU and PRSU with these conditions.

In March 2021, the Company adopted the Globant S.A. 2021 Employee Share Purchase Plan (the "ESPP") which provides eligible employees with an opportunity to acquire a proprietary interest in the Company through the purchase of the Company's common shares.

The ESPP permits participants to purchase Common Shares through payroll deductions defined by the employee up to a maximum percentage set in each country of their eligible compensation. The ESPP will typically be implemented through consecutive six months offering periods. Amounts deducted and accumulated from participant compensation will be used to purchase Common Shares at the end of each offering period. Under the terms of the ESPP, the purchase price of the shares shall not be less than 90.0% of the lower of the fair market value of a Common Share on the first trading day of the offering period or on the purchase date. Subject to adjustment as provided by the ESPP and unless otherwise provided by the Compensation Committee, the purchase price for each offering period shall be 90% of the fair market value of a Common Share on the purchase date.

During the twelve months ended December 31, 2023, 2022 and 2021, in connection with the ESPP Plan, the Company has repurchased 42,500, 46,500 and 27,000 , respectively, and 48,130, 39,136 and 7,453 have been delivered, respectively.

Fair value of share-based compensation granted in 2022

Share-based compensation expense for awards of equity instruments to employees and non-employee directors is determined based on the grant-date fair value of the awards. Fair value is calculated using the American Binomial model.

The American Binomial model requires the input of highly subjective assumptions, including the fair value of the Company's shares, expected volatility, expected term and risk-free interest rate.

AssumptionsGranted in 2022 for 2014 Plan
Original AssumptionsModifications to Original Assumptions
Non US EmployeesUS Employees
Stock price206.23133.3128.8
Expected life
7 years
8 years
7 years
Volatility42.78%
Risk-free interest rate2.63%

The share based payment was modified as detailed in the table above. The incremental fair value determined was 19.63 and 14.61 for Non US Employees and US Employees, respectively, and will be accrued in the remaining period.
F-61

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)


The Company estimated the following assumptions for the calculation of the fair value of the awards:

Fair value of the shares: For the 2014 Equity Incentive Plan, the fair value of the shares is based on the quoted market price of the Company's shares at the grant date.

Expected volatility: The expected volatility of the Company's shares is calculated by using the average share price volatility of the Company since July 1, 2014 to the date of grant, excluding COVID-19 pandemic period from March 2020 to May 2020.

Expected term: The expected life of awards represents the period of time the granted awards are expected to be outstanding.

Risk free rate: The risk-free rate for periods within the contractual life of the award is based on the U.S. Federal Treasury yield curve with maturities similar to the expected term of the awards.

25.5 Cash-settled share-based payments under 2014 Equity Incentive Plan

On December 1, 2021, our Compensation Committee approved the granting of awards in the form of Stock-Equivalent Units to be settled in cash or common shares ("SEUs Plan"), or a combination thereof, under the 2014 Equity Incentive Plan. The purpose of the SEUs Plan is to provide an incentive to attract, retain and reward talent in the IT industry and to prompt such persons to contribute to the growth and profitability of the Company. The SEUs Plan provides all eligible employees the opportunity of receiving a grant of SEUs with a unit value equal to the market value of one common share of the Company, to be settled in cash or common shares of the Company.

As of December 31, 2022, the Company has granted 61,072 stock equivalent units. As of December 31, 2023 no stock equivalent unit has been granted.

NOTE 26 – BUSINESS COMBINATIONS
 
26.1 Business combinations 2023

On April 20, 2023, Globant, S.A. (the "Company"), through its subsidiary Globant, LLC, entered into an Equity Purchase Agreement (the "Agreement") with the equity holders of ExperienceIT LLC ("ExperienceIT"), an American limited liability company pursuant to which the Company purchased all of the outstanding interest. The transaction was simultaneously signed and closed. ExperienceIT's business consists in the provision of advisory services and training in connection with end-to-end digital transformation projects related to, among other things, customer service experience, M&A integration, IT integration and digital optimization.

On May 6, 2023, Globant, S.A. (the "Company"), through its subsidiary Globant España S.A., entered into an Equity Purchase Agreement (the "Agreement") with the equity holders of Pentalog France, société par actions simplifiée, a French corporation and its subsidiaries, Pentalog HR SASU, a French corporation, Pentalog Deutschland GmbH, a German corporation, Pentalog Vietnam Co. Ltd., a Vietnamese corporation, Pentalog Chi S.R.L., a Moldovan corporation, Pentalog Romania SRL, a Romanian corporation, Pentalog HR Romania SRL a Romanian corporation, Pentalog Mexico S. de R.L. de C.V., a Mexican corporation, Pentalog Americas LLC, an American corporation, Pentalog UK Ltd, a British corporation, and Python Bidco, a French corporation, all together referred to as "Pentalog", pursuant to which the Company purchased all of the outstanding interest. The transaction was signed on May 6, 2023 and the closing date was on July 20, 2023. Pentalog business consists on the provision of outsourced digital services to third-parties, including the design, development and scaling of custom software solutions, and the management of a digital platform designed to onboard software developers, professionally vet them and provide their services to customers.

F-62

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

On August 3, 2023, Globant, S.A. (the "Company"), through its subsidiary Sysdata S.p.A, entered into an Asset and Business Purchase Agreement (the "Agreement") with the equity holders of Chili S.p.A and Chili Tech S.r.l., Italian companies pursuant to which the Company purchased all of the outstanding interest. The transaction was simultaneously signed and closed. The assets include, among others, a Technology Services and Solutions Agreement for FIFA+ entered into by and between the Sellers, as services providers, and FIFA, as client, dated March 21, 2023, as well as certain third-party agreement entered into by Wurl LLC and Chili on February 14, 2022, selected employees, certain technological assets necessary or convenient to carry out the Business, certain business and IP licenses to be granted by the Sellers to the Purchaser, and certain capped liabilities related thereto, all of which as a going-concern (the “Transferred Business”).

On October 19, 2023, the Company, jointly with its subsidiary Globant España S.A. ("Globant España"), entered into a Securities Purchase Agreement (the "SPA"), with, among others, the equity holders of GUT Agency LTD, an English and Welsh company (the "Sellers" and "GUT UK", respectively), pursuant to which (i) Globant España purchased from the Sellers sixty per cent (60%) of the issued and outstanding equity interest of GUT UK, and (ii) our Spanish subsidiary Software Product Creation S.L. ("SPC"), acquired an additional five per cent (5%) of the issued and outstanding equity interest of GUT Argentina S.R.L., an Argentine subsidiary of GUT UK ("GUT ARG"). The transaction was simultaneously signed and closed. GUT UK is a full-service advertising agency, including ideation and advertising production services, as well as brand positioning strategy, brand architecture and experience journey, creative strategy sprints, communications planning, social strategy, media planning and buying, content platform, influencer marketing, performance marketing, loyalty programs, and data and analytics services related to the foregoing.

On December 8, 2023, the Company jointly with its subsidiary Globant Brasil Consultoria Ltda., entered into an Equity Purchase Agreement (the "Agreement") with the equity holder of Iteris Holding Ltda., a company organized under the Laws of Brazil ("Iteris") and its subsidiaries Briteris LLC, an American company organized under the Laws of Delaware and Iteris Consultoria e Software Ltda., a company organized under the Laws of Brazil, pursuant to which the Company purchased all of the outstanding interest. The transaction was simultaneously signed and closed. Iteris business consists of the provision and development of services for end-to-end digital transformation projects, namely agile transformation, product design, product discovery, product management, software quality management, solution architecture, advanced analytics, big data, business intelligence, data visualization, artificial intelligence, API & microservices, cloud, devops, test automation, web & mobile development, microsoft 365 E sharepoint, mulesoft anypoint platform, cap platform and PO-RH.

The table below gives additional details related to these acquisitions:
Fair value of the consideration transferred at the acquisition date
Down payment (1)
351,759 
Working capital adjustment505 
Installment Payments (2)
39,659 
Contingent consideration (3)
59,062 
Total consideration450,985 
(1) Payment in cash 286,695 and 65,064 in G-shares (including 139,564 in cash and 32,320 in G-shares related to Pentalog acquisition).
(2) Contains 37,005 of liability, current and non-current, payable in a variable number of shares (including 10,066 related to Pentalog acquisition).
(3) Consist of 11,463 and 47,599 as Other financial liabilities current and non-current, respectively.

For contingent considerations, an estimate of the range of outcomes and the significant inputs related are disclosed in note 29.9.1

Acquisition related expenses were not material and were recognized directly as expensed.

As of the date of issuance of these consolidated financial statements, the accounting for the GUT and Iteris acquisition is incomplete; hence, pursuant the guidance in IFRS 3, the Company has included preliminary amounts and disclosures as it relates to:

• Fair value of the total consideration transferred since the Company has not completed the fair value analysis of the consideration transferred as of the date of issuance of these financial statements.
F-63

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)


• The amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed, the total amount of goodwill (including a qualitative description of the factors that make up the goodwill recognized and the amount of goodwill that will be deducted for tax purposes) and other intangibles, as applicable.

• The gross contractual amounts of the acquired receivables, and the best estimate at the acquisition date of the contractual cash flows not expected to be collected. For each contingent liability to be recognized, if any, an estimate of its financial effect, an indication of the uncertainties relating to the amount or timing of any outflow and the possibility of any reimbursement, and the reasons why the liability cannot be measured reliably, if applicable.

• The amount of revenues and profit or loss of the acquired subsidiaries since the acquisition date, and the amount of revenues and profit or loss of the combined entity as if the acquisition has been made at the beginning of the reporting period, since the acquired subsidiaries did not have available financial information prepared under IFRS at the acquisition date. The preparation of this information under IFRS has not been completed as of the date of issuance of these financial statements.

• The amount of the non–controlling interest in the acquired companies recognized at the acquisition date.

26.1.1 Non-controlling Interest Acquisition

During 2023 the Company made some individually immaterial acquisitions which were completed primarily to expand our services and solutions offerings.

On July 8, 2021 Software Product Creation, S.L. (the "Majority Shareholder") and Globant, S.A., with Internet Business Intelligent Insite, S.L. and Next Generation Communication Services, S.L. (jointly referred to as the "Minority Shareholder") entered into a put and call option agreement over the remaining twenty percent (20%) of Walmeric Soluciones, S.L (the "Option shares"), with the purpose to set out the terms and conditions of: (i) a put option over the Option Shares to be granted by Software Product Creation, S.L. in favor of the Minority Shareholders; and (ii) a call option over the Option Shares to be granted by the Minority Shareholders in favor of Software Product Creation, S.L., which can be exercised by the non-controlling shareholders from March 1, 2022 till March 1, 2024.

On July 8, 2021 the Company recognized in equity a put option over non-controlling interest of Walmeric for 16,285.

On March 30, 2022 the company exercise the call/put option of the year 2022 of the 6% over the non-controlling interest of Walmeric, leaving a non-controlling interest for the 14%.

As of December 31, 2022, the Company has recognized as current and non-current other financial liabilities the written put option for an amount 3,871 and 5,515, respectively, equal to the present value of the redemption amount.

On March 16, 2023, Software Product Creation, S.L. (the "Majority Shareholder") with Internet Business Intelligent Insite, S.L. and Next Generation Communication Services (jointly referred to as the "the Sellers"), entered into a new agreement pursuant to which the Sellers agree to: (i) sell and transfer the remaining shares; (ii) terminate the Shareholders Agreement and the Put and Call Option Agreement, and (iii) the regulation of certain covenants undertaken by the Parties.

With such agreement, the parties agree to transfer the remaining shares (the 14% of non-controlling interest) for a cash payment equal to the value of the Put Option of the year 2023 plus a contingent consideration to be determined based on the terms of the Put Option of the year 2024, which is subject to the achievement of financial targets for the year 2023. The result for the transaction amounted to 1,589 and is disclosed in Other income and expenses, net line item.

26.2 - Purchase Price Allocation

As of December 31, 2023, the fair values of the assets acquired, liabilities assumed and goodwill amounted to 174,029, 116,195 and 401,164, respectively, from which certain acquisitions are determined on preliminary basis and amounted to 77,722, 54,261 and 195,137, respectively, determined at the date of acquisition in the business combinations.

As of December 31, 2022, the fair values of the assets acquired, liabilities assumed and goodwill amounted to 186,540, 57,679 and 184,036, respectively, determined at the date of acquisition in the business combinations.

F-64

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

 As of Acquisition Date
20232022
Current assets
Cash and cash equivalents33,004 46,075 
Investments1,327 1,152 
Trade receivables62,692 33,539 
Other receivables24,006 8,022 
Indemnification asset4,088 —  
Other assets 3 
Non current assets
Other receivables2,743 372 
Other financial assets3  
Property and equipment3,382 1,323 
Intangibles (1)
36,800 83,215 
Right-of-use asset3,740 3,624 
Deferred tax2,244 8,498 
Investment in associates 717 
Goodwill (2)
401,164 184,036 
Current liabilities
Trade and other payables(29,422)(23,217)
Lease liabilities(3,883)(716)
Tax liabilities(13,848)(6,101)
Payroll and social security(28,527)(10,772)
Other liabilities(466)(571)
Borrowings(4,105)(2,958)
Non current liabilities
Deferred tax liabilities(5,185)(9,647)
Lease liabilities(10)(3,076)
Borrowings(26,590)(52)
Contingencies(4,159)(569)
Non-controlling interest (3)
(8,013)(45,216)
Total consideration450,985 267,681 

(1) As of Acquisition Date in, 2023 and 2022, the amount of 35,811 and 34,250, respectively, have been allocated to customer relationships and contracts (including 22,364 related to Pentalog acquisition), 38 and 33,370 as licenses and platforms, respectively.
(2) Goodwill has arisen because the consideration paid for these acquisitions included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce of acquired companies. Only the customer contracts and relationships, internally used software, platforms and non-compete agreements are recognized as intangible. The other benefits are not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. As of December 31, 2023 and 2022, 401,163 and 184,036, are not deductible for tax purposes, respectively.
(3)Non-controlling interest in acquired companies are measured at the non-controlling interests’ proportionate share of the acquiree’s identifiable net assets at its fair values.

The fair values of the receivables acquired do not differ from their gross contractual amount.
F-65

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)


26.3 Impact of acquisitions on the results of the Company
The net income for the year ended December 31, 2023 includes a gain of 7,593 attributable to the business generated by the companies acquired in 2023. Revenue for the year ended December 31, 2023 includes 90,812 related to the business of those companies.

Had the businesses combinations made in 2023 been performed on January 1, 2023, the consolidated revenue of the Company would have been 2,257,256 and the net income for the year ended December 31, 2023, would have been 159,738.

26.4 Goodwill

Goodwill is measured as the excess of the cost of an acquisition over the sum of the amounts assigned to net assets acquired less liabilities assumed.

The Company evaluates goodwill for impairment at least annually or more frequently when there is an indication that the cash generating unit ("CGU") may be impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use.

The Company first determines the value of the unit using the market approach. For the purposes of the calculation, the Company considers the value of the shares in the market.

In addition, the Company measures the CGU based on value-in-use calculations, which requires the use of various assumptions including revenue growth, gross margin, terminal growth rate and discount rates. The assumptions considered by the Company as of December 31, 2023 and 2022, were the following: projected cash flows for the following five years for both years, the average growth rate considered was 19.1% and 21.6%, respectively, and the rate used to discount cash flows was 10.9% and 11.2%, respectively. The long-term rate used to extrapolate cash flows beyond the projected period as of December 31, 2023 and 2022, was 4%. The recoverable amount is the higher of an asset's fair value less cost of disposals and value in use.

Very material adverse changes in key assumptions about the businesses and their prospects or an adverse change in market conditions may cause a change in the estimation of recoverable value and could result in an impairment charge. Based upon the Company's evaluation of goodwill, no impairment were recognized during 2023, 2022 and 2021.

A reconciliation of the goodwill from opening to closing balances is as follows:
 As of December 31,
 20232022
Cost  
Balance at beginning of year734,952 567,451 
Additions related to new acquisitions (note 26.2)401,163 184,036 
Translation25,293 (17,322)
Measurement period adjustment2,275 787 
Balance at end of year1,163,683 734,952 

26.5 Effects of offsetting on acquisition

As part of the acquisition of Pentalog, the sellers agreed to indemnify the Company for the outcome of certain contingencies. As a result, the Company has recognized an indemnification asset for a total amount of 4,088, as of December 31, 2023. The consideration for this acquisition includes 10,266 (11,139 measured at present value) as of December 31, 2023, which are subject to adjustments, deductions and withholdings related to the indemnified contingencies. Consequently, the Company has off-set the indemnification asset against the amount payable to the sellers.
F-66

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

As of December 31, 2023
Gross Amount10,266 
Gross amount set off in the balance sheet4,088 
Net amount presented in the balanced sheet6,178 

26.6 Impact of the acquisition of Adbid and Sports Reinvention Entertainment Group, S.L

The Company completed the fair value determination of the consideration for the acquisition of Adbid and Sports Reinvention Entertainment Group S.L within the measurement period, resulting in:
December 31, 2022
Decrease Working Capital(1,128)
Intangible Assets recognized960 
Goodwill(4,252)
Other financial liabilities - decrease in contingent consideration4,167 
Non-controlling interest253 

NOTE 27 – SEGMENT INFORMATION
 
Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding on how to allocate resources and in assessing performance. The Company’s CODM is considered to be the Company’s chief executive officer (“CEO”). The CEO reviews operating profit presented on an entity level basis for purposes of making operating decisions and assessing financial performance. Therefore, the Company has determined that it operates in a single operating and reportable segment.
 
The Company provides services related to technology consultancy and digital solutions, and from a broad array of AI-based solutions to world-class enterprise systems.























F-67

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

The following table summarizes revenues by geography, based on the customers' location:
 
 For the year ended December 31,
 202320222021
North America   
United States of America1,210,981 1,095,895 803,934 
Canada32,735 38,895 26,970 
Puerto Rico2,256 358 396 
Subtotal North America1,245,972 1,135,148 831,300 
Europe, Middle East & Africa
Spain148,465 86,410 94,459 
United Kingdom55,746 45,017 27,156 
Italy28,384 9,320 507 
France25,854 6,593 2,600 
Switzerland16,932 8,859 5,710 
Saudi Arabia12,731 4,187  
Germany6,613 5,840 1,424 
Netherlands5,666 4,975 3,604 
Belgium5,245 5,577 8,705 
Ireland3,688 1,104 1,435 
Sweden3,506 897 53 
Romania2,350   
Austria2,250 131  
Malta1,887 899 386 
Luxembourg1,790 3,676 4,777 
Denmark668 2,246 411 
Others1,771 992 107 
Subtotal Europe, Middle East & Africa323,546 186,723 151,334 
Asia & Oceania
India20,060 21,191 10,442 
Japan18,031 11,739 8,514 
Australia11,566 3,010 5,223 
Hong Kong9,261 1,350  
Singapore2,696 2,600 906 
United Arab Emirates1,051 8,938 401 
Others533 1,190 643 
Subtotal Asia & Oceania63,198 50,018 26,129 
Latin America
Argentina137,207 120,578 87,756 
Chile97,049 115,494 86,809 
Mexico96,075 75,442 53,455 
Brazil58,061 31,060 20,821 
Peru27,091 25,131 15,695 
Colombia25,122 19,206 14,357 
Dominican Republic7,068 5,706 3,788 
Panama5,609 2,698 744 
Uruguay3,774 2,993 755 
Ecuador2,572 5,175 1,061 
Paraguay988 3,088 2,823 
Others2,607 1,783 251 
Subtotal Latin America463,223 408,354 288,315 
TOTAL2,095,939 1,780,243 1,297,078 

One largest customer accounted for 8.7%, 10.7% and 10.9% of revenues for the years ended December 31, 2023, 2022 and 2021.
F-68

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

The following table summarizes non-current assets other than deferred taxes as stated in IFRS 8, paragraph 33.b, by jurisdiction:
 As of December 31,
 20232022
Spain625,152 587,354 
United States of America156,132 83,666 
Brazil151,599 28,649 
United Kingdom133,975 51,746 
Argentina129,978 156,594 
France114,079 44 
Colombia61,447 64,666 
Mexico54,160 51,965 
Uruguay54,109 47,903 
Italy52,111 27,844 
Denmark32,124 32,469 
Germany24,973 1,112 
Australia24,776 24,779 
Hong Kong15,931 15,577 
Chile12,341 13,395 
India12,269 26,814 
Canada11,762 103 
Romania7,173 1,492 
Peru6,656 8,393 
Costa Rica5,067 821 
Luxembourg4,226 4,226 
Belarus3,216 5,461 
Ukraine1,484  
Poland769 42 
Ecuador754 690 
Moldova594  
Vietnam219  
Other countries237 87 
TOTAL1,697,313 1,235,892 

NOTE 28 – LEASES
 
The Company is obligated under various leases for office spaces and office equipment.

Movements in right-of-use assets and lease liabilities as of December 31, 2023 and 2022 were as follows:
Office spacesOffice equipmentsComputersTotal
Right-of-use assets
January 1, 2023108,610 19,243 19,458 147,311 
Additions6,735 206 3,383 10,324 
Additions from business combinations (note 26.2)3,740   3,740 
Disposals(2,543)  (2,543)
Depreciation (note 6)(25,680)(3,265)(11,037)(39,982)
Foreign currency translation550   550 
December 31, 202391,412 16,184 11,804 119,400 

F-69

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

Office spacesOffice equipmentsComputersTotal
Right-of-use assets
January 1, 2022104,565 22,104 17,912 144,581 
Additions22,403 320 11,809 34,532 
Additions from business combinations (note 26.2)3,624   3,624 
Depreciation (note 6)(21,800)(3,181)(10,263)(35,244)
Foreign currency translation(182)  (182)
December 31, 2022108,610 19,24319,458147,311

Lease liabilities
As of December 31,
20232022
Balance at beginning of year135,138 134,485 
Additions (1)
10,324 36,090 
Additions from business combinations (note 26.2)3,893 3,792 
Foreign exchange difference (1)
8,256 (7,976)
Foreign currency translation (2)
351 (689)
Interest expense (1)
6,319 6,822 
Payments (2)
(44,833)(37,386)
Disposals(712) 
Balance at end of year118,736 135,138 

(1) Non-cash transactions.
(2) Cash transactions.

The Company has some lease contracts that have not yet commenced as of December 31, 2023 and 2022 . The future lease payments for these lease contracts are disclosed as follows:

As of December 31, 2023
YearAmount
20241,968 
20251,968 
20261,968 
20271,968 
20281,968 

As of December 31, 2022
YearAmount
2023207 
2024311 
2025311 
2026311 
2027311 
2028104 
F-70

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

The outstanding balance of the lease liabilities as of December 31, 2023 and 2022 is as follows:
As of December 31,
20232022
Lease liabilities
Current47,852 37,681 
Non-current70,884 97,457 
TOTAL118,736 135,138 

The maturity analysis of lease liabilities is presented in note 29.5.

The expense related to short-term and low-value leases was not material.

NOTE 29 – FINANCIAL INSTRUMENTS

29.1 - Categories of financial instruments
As of December 31, 2023
FVTPLFVTOCIAmortized cost
Financial assets
Cash and cash equivalents — — 307,223 
Investments
Mutual funds13,570 — — 
Commercial Papers2,500 — — 
Contribution to funds— — 1,833 
Trade receivables— — 499,283 
Other assets— — 35,841 
Other receivables— — 17,474 
Other financial assets
Convertible notes9,110 — — 
Foreign exchange forward contracts2,330 8,078 — 
Equity instruments— 29,354 — 
Interest rate SWAP852 — — 
Equity forward contract— 558 — 


F-71

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

As of December 31, 2023
FVTPLFVTOCIAmortized cost
Financial liabilities
Trade payables— — 119,477 
Borrowings— — 159,107 
Other financial liabilities (1)
Other financial liabilities related to business combinations95,216 — 72,287 
Foreign exchange forward contracts308 3 — 
Equity forward contract— 1,167 — 
Others— — 28 
Lease liabilities— — 118,736 
Other liabilities — — 896 
(1) The Company recognized a put option liability for 75,813 (see note 3.13.3) related to the minority interest of GUT. Changes in the measurement of the redemption amount are recognized in the statements of changes in equity.

As of December 31, 2022
FVTPLFVTOCIAmortized cost
Financial assets
Cash and cash equivalents— — 292,457 
Investments
Mutual funds47,009 — — 
Contribution to funds— — 1,513 
Bills issued by the Treasury Department of the U.S. ("T-Bills")— 1,399 — 
Trade receivables— — 424,810 
Other assets— — 25,854 
Other receivables— — 12,122 
Other financial assets
Convertible notes6,684 — — 
Foreign exchange forward contracts552 2,957 — 
Equity instruments— 27,892 — 
Interest rate SWAP3,416 — — 
Others— — 6 
Financial liabilities
Trade payables— — 91,313 
Borrowings— — 3,699 
Other financial liabilities
Foreign exchange forward contracts2,004 1,571 — 
Other financial liabilities related to business combinations54,667 — 65,857 
Put option on minority interest of Walmeric— 9,386 
Equity forward contract— 3,886  
Lease liabilities— — 135,138 
Other liabilities— — 808 

F-72

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

29.2 - Market risk
 
The Company is exposed to a variety of risks: market risk, including the effects of changes in foreign currency exchange rates and interest rates, and liquidity risk.
 
The Company's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial performance. The Company does not use derivative instruments to hedge its exposure to risks, apart from those mentioned in note 29.10 and 29.11.
 
29.3 - Foreign currency risk management
 
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.
 
Except for the subsidiaries that have its local currency as functional currency, the functional currency of the Company and its subsidiaries is the U.S. dollar. In 2023, 72.27% of the Company's revenues are denominated in U.S. dollars. Because the majority of its personnel are located in Latin America, the Company incurs the majority of its operating expenses and capital expenditures in non-U.S. dollar currencies, primarily the Colombian peso, Mexican peso, Chilean peso, Peruvian sol, Uruguayan peso and Brazilian real. Operating expenses are also significantly incurred in Indian Rupee, Great Britain Pound and European Union Euros.

Foreign exchange sensitivity analysis

The Company is mainly exposed to Argentine pesos, Australian Dollar, Chilean pesos, Colombian pesos, Danish Krone, Indian rupees, European Union euros, Mexican pesos, Pounds sterling and Uruguayan pesos.
 
The following tables illustrate the Company's sensitivity to increases and decreases in the U.S. dollar against the relevant foreign currency. The following sensitivity analysis includes outstanding foreign currency denominated monetary items at December 31, 2023 and adjusts their translation at the year-end for changes in U.S. dollars against the relevant foreign currency. 

   Gain/(loss)
AccountCurrencyAmount% IncreaseAmount% DecreaseAmount
Net balancesArgentine pesos6,573 30 %(1,517)10 %730 
Australian Dollar(16,018)10 %1,456 10 %(1,780)
Chilean pesos(191)10 %17 10 %(21)
Colombian pesos(49,959)10 %4,542 10 %(5,551)
Danish Krone(11,052)10 %1,005 10 %(1,228)
Indian Rupees(21,514)10 %1,956 10 %(2,390)
European Union euros6,705 10 %(610)10 %745 
Mexican pesos(4,403)10 %400 10 %(489)
Pound sterling(4,662)10 %424 10 %(518)
Uruguayan pesos(10,131)10 %921 10 %(1,126)
 TOTAL(104,652)8,594 (11,628)

As explained in note 29.10, the subsidiaries in Argentina, Colombia, United States, Mexico, Chile and Uruguay entered into foreign exchange forward and future contracts in order to mitigate the risk of fluctuations in the foreign exchange rate and reduce the impact in the financial statements.

The effect in equity of the U.S. dollar fluctuation against the relevant foreign currency as of December 31, 2023, is not material.

F-73

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

Depreciation of the Argentine Peso

During 2023, the Argentine peso experienced a 355.7% devaluation from 177.06 Argentine peso per U.S dollar to 806.95 Argentine peso per U.S dollar.
 
During 2022, the Argentine peso experienced a 72.5% devaluation from 102.62 Argentine peso per U.S dollar to 177.06 Argentine peso per U.S dollar.

29.4 - Interest rate risk management
 
The Company's exposure to market risk for changes in interest rates relates primarily to its cash and bank balances and its credit facilities. The Company's credit line in the U.S. bear interest at a fixed rate between 1.25% or 1.88% depending on the amount borrowed. During the beginning of 2021 the Company chose to discontinue the hedge accounting of the remaining interest rate swap acquired during 2020, since the hedged future cash flows were no longer expected to occur. As of December 31, 2022 and 2021, the Company has recognized a loss of 255 and a gain of 132 included in the line item "Other comprehensive income", respectively. As of December 31, 2023, 2022 and 2021 the Company has recognized a net gain of 356, 3,701 and 837, respectively, through results of profit and loss.

Interest rate swap assets and liabilities are presented in the line item "Other financial assets" and "Other financial liabilities" within the statements of financial position, respectively.

Interest rate swap contracts outstanding as of December 31, 2023 and 2022:

Floating rateFixed rate Fair value
Maturity DateNotionalreceivablepayableassets / (liabilities)
Instruments for which hedge accounting has been discontinued
Current
March 11, 202415,000SOFR0.647 %181 
March 12, 202420,000SOFR0.566 %245 
April 30, 202425,000SOFR0.355 %426 
Fair value as of December 31, 2023852 
Instruments for which hedge accounting has been discontinued
March 31, 202315,0001month LIBOR0.511 %155 
March 11, 202415,0001month LIBOR0.647 %771 
March 12, 202420,0001month LIBOR0.566 %1,045 
April 30, 202425,0001month LIBOR0.355 %1,445 
Fair value as of December 31, 20223,416 

29.5 – Liquidity risk management
 
The Company's primary sources of liquidity are cash flows from operating activities and borrowings under credit facilities. See note 21.
 
Management monitors rolling forecasts of the Company's liquidity position on the basis of expected cash flow.
 
The table below analyzes financial liabilities into relevant maturity groups based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
 
F-74

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

 Expected Maturity Date
 202420252026ThereafterTotal
Trade payables124,5451,585686710127,526
Borrowings157,654738715159,107
Lease liabilities48,38935,10224,03766,392173,920
Other financial liabilities(*)
80,17090,38342,05130,411243,015
TOTAL410,758127,80867,48997,513703,568

(*) The amounts disclosed in the line of other financial liabilities do not include foreign exchange forward contracts, equity forward contracts and 57,849 related to business combinations payments through subscription agreements.

29.6 - Concentration of credit risk
 
The Company derives revenues from clients in the U.S. (approximately 58%) and clients related from diverse industries. For the years ended December 31, 2023, 2022 and 2021, the Company's top five clients accounted for 22.9%, 25.6% and 26.7% of its revenues, respectively. One single customer accounted for 8.7%, 10.7% and 10.9% of revenues for the years ended December 31, 2023, 2022 and 2021. Credit risk from trade receivables is considered to be low because the Company minimize the risk by setting credit limits for its customers, which are mainly large and renowned companies. Cash and cash equivalents and derivative financial instruments are considered to have low credit risk because these assets are held with widely renowned financial institutions (see note 13) .

29.7 - Fair value of financial instruments that are not measured at fair value
 
Except as detailed in the following table, the carrying amounts of financial assets and liabilities included in the consolidated statement of financial position as of December 31, 2023 and 2022, are a reasonable approximation of fair value due to the short time of realization.  
As of December 31, 2023As of December 31, 2022
Carrying amountFair valueCarrying amountFair value
Non-current assets
Other receivables
Guarantee deposits7,558 6,447 5,942 5,686 
Other assets4,088 3,486 10,657 9,780 
Non-current liabilities
Trade payables2,981 2,779 5,445 5,053 
Borrowings2,191 1,907 861 645 

29.8 - Fair value measurements recognized in the consolidated statement of financial position
 
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into a three-level fair value hierarchy as mandated by IFRS 13, as follows:
 
Level 1 fair value measurements are those derived from quoted market prices (unadjusted) in active markets for identical assets or liabilities.
 
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
 
Level 3 fair value measurements are those derived from unobservable inputs for the assets or liabilities.
F-75

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

 As of December 31, 2023
 Level 1Level 2Level 3Total
Financial assets    
Mutual funds (1)
 13,570  13,570 
Commercial Papers2,500   2,500 
Foreign exchange forward contracts 10,408  10,408 
Convertibles notes  9,110 9,110 
Equity instrument   29,354 29,354 
Interest rate SWAP 852  852 
Equity forward contract 558  558 
Financial liabilities
Contingent consideration  95,216 95,216 
Foreign exchange forward contracts 311  311 
Equity forward contract 1,167  1,167 
 As of December 31, 2022
 Level 1Level 2Level 3Total
Financial assets    
Mutual funds (1)
 47,009  47,009 
Bills issued by the Treasury Department of the U.S. ("T-Bills")1,399   1,399 
Foreign exchange forward contracts 3,509  3,509 
Convertibles notes  6,684 6,684 
Equity instrument  27,892 27,892 
Interest rate SWAP 3,416  3,416 
Financial liabilities
Contingent consideration  54,667 54,667 
Foreign exchange forward contracts 3,575  3,575 
Equity forward contract 3,886  3,886 
(1) Mutual funds are measured at fair value through profit or loss, based on the changes of the fund's net asset value.
 
There were no transfers of financial assets and liabilities between Level 1, Level 2 and Level 3 during the period.
 
The Company has applied the market approach technique in order to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable (i.e., similar) assets, liabilities or a group of assets and liabilities.

When the inputs required by the market approach are not available, the Company applies the income approach technique. The income approach technique estimates the fair value of an asset or a liability by converting future amounts (e.g. cash flows or income and expenses) to a single current (i.e. discounted) amount. When the income approach is used, the fair value measurement reflects current market expectations about those future amounts.




F-76

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

29.9 Level 3
 
29.9.1 Contingent consideration

As described in note 26.1, certain acquisitions included contingent consideration agreements which are payable on a deferred basis and which will be subject to the occurrence of certain events relating to the acquired company's financial performance like revenue, gross margin and operating margin.

The actual amounts to be paid under the contingent consideration arrangements may be increased proportionally to the target's achievements and are not subject to any maximum amount.

The fair values of the contingent consideration arrangements are estimated by using a probabilistic framework such as Montecarlo simulation where each iteration was discounted to present value using a discount rate. In other cases the contingent consideration was estimated by discounting to present value using a risk-adjusted discount rate.

The Company also performed an estimation of the potential minimum amount of all future payments that could be required to be made under the agreements.

As of December 31, 2023 the nominal value, minimum amount and fair value amounted to 107,920, 64,083, and 95,216, respectively.

As of December 31, 2022 the nominal value, minimum amount and fair value amounted to 69,005, 61,683, and 54,667, respectively.

During 2023 the Company paid the aggregate consideration of 24,086 related to the target achievements during the year 2022.

As of December 31, 2023, 2022, and 2021 the results from remeasurement of the contingent considerations resulted in a net gain of 4,227, 967, and a net loss of 4,322, respectively. During 2023 it mainly includes a loss of 5,555 related to eWave and Genexus acquisition, and a gain of 9,665 related to Experience IT, Walmeric and KTBO acquisition.

The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurements:

DescriptionFair Value at December 31, 2023Unobservable inputsRange of inputsRelationship of unobservable inputs to Fair Value
Contingent consideration95,216Risk adjusted discount rate
Between 3.70% and 13.3%
An increase in the discount rates by 1% would increase the fair value by $3,298 and a decrease in the discount rates by 1% would increase the fair value by $3,689
Contingent consideration95,216Expected revenues
Between 9,559 and 51,671
An increase in the expected revenues by 10% would increase the fair value by $13,134 and a decrease in the expected revenues by 10% would decrease the fair value by $8,754
Contingent consideration95,216Expected operating margin
Between 27.90% and 63.00%
An increase in the expected operating margin by 10% would increase the fair value by $2,825 and a increase in the expected operating margin by 10% would decrease the fair value by $1,879






F-77

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

29.9.2 Convertible notes

As described in note 3.12.8, the Company entered into several convertible notes that include the right to convert the outstanding amount into equity shares of the invested companies. The fair value of such convertible notes was estimated using unobservable inputs. The amounts of gains and losses for the period related to changes in the fair value of the convertible notes were not material.

29.9.3. Reconciliation of recurring fair value measurements categorized within Level 3

The following table shows the reconciliation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
Financial AssetsFinancial liabilities
Convertible notesEquity instrumentContingent consideration
December 31, 20213,875 22,088 58,180 
Fair value remeasurement (1)
— 285 (967)
Acquisition of business (1)
— — 32,992 
Acquisition of investment (3)
2,667 5,519 — 
Payments (2)
— — (28,717)
Interests (1)
146 — 1,484 
Reclassifications (1)
— — (5,060)
Foreign exchange difference (1)
(4)— (1,528)
Translation (1)
— — (890)
Others (1)
  (827)
December 31, 20226,684 27,892 54,667 

Financial AssetsFinancial liabilities
Convertible notesEquity instrumentContingent consideration
December 31, 20226,684 27,892 54,667 
Fair value remeasurement (1)
— (286)(4,227)
Acquisition of business (1)
— — 59,062 
Acquisition of investment (3)
2,367 1,748 — 
Payments (2)
— — (24,086)
Interests (1)
59 — 3,641 
Reclassifications (1)
— — 5,736 
Foreign exchange difference (1)
— — 1,153 
Translation (1)
— — 823 
Others (1)
— — (1,553)
December 31, 20239,110 29,354 95,216 

(1) Non-cash transactions.
(2) Cash transactions included in investing activities, except for remeasurement of contingent considerations which are in operating activities, in the Consolidated Statement of Cash Flows.
(3) As of December 31, 2023 and 2022 the amount of 1,748 and 5,148, respectively were Cash transactions included in investing activities in the consolidated statement of cash flows.

F-78

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

29.10 Foreign exchange futures and forward contracts

During 2023 and 2022, certain subsidiaries from Argentina, Uruguay, Chile, Colombia and Mexico acquired foreign exchange forward contracts with certain banks in U.S. dollars, with the purpose of hedging the possible decrease of assets' value held in the local currencies from each country, due to the risk of exposure to fluctuations in those foreign currencies and a subsidiary in the United States of America has also acquired foreign exchange forward contracts with certain banks, with the purpose of hedging the exposure in currencies different than U.S dollar. Those contracts were recognized, according to IFRS 9, as financial assets at fair value through profit or loss. For the years ended December 31, 2023 and 2022, the Company recognized a net gain of 13,045 and a net loss of 13,727, respectively. As of December 31, 2023 and 2022, the foreign exchange forward contracts that were recognized as financial assets and liabilities at fair value through profit or loss were as follows:

CurrencyForeign currencyNotional foreignFair value assets /
Settlement datefrom contractsrate from contractscurrency rate(liabilities)
January 31, 2024Australian Dollar1.541.46 789 
January 31, 2024Danish Krone6.826.71 172 
January 31, 2024Pound Sterling0.820.78 63 
January 31, 2024Pound Sterling0.790.78 14 
January 31, 2024Uruguayan Peso39.4639.21 29 
January 31, 2024Indian Rupee83.5183.31 19 
January 31, 2024Indian Rupee83.4483.25 17 
January 31, 2024Euro0.910.90 8 
January 31, 2024Colombian Peso4,006.503,846.04 336 
January 31, 2024Colombian Peso4,005.083,846.03 333 
January 31, 2024Colombian Peso4,004.073,846.02 331 
February 29, 2024Colombian Peso3,898.503,868.41 62 
February 29, 2024Colombian Peso3,907.003,866.64 83 
February 29, 2024Colombian Peso3,901.803,865.84 74 
Fair value as of December 31, 20232,330
January 31, 2023Argentinian Peso191.95192.57 17 
January 31, 2023Mexican Peso19.8719.59 71 
January 31, 2023Colombian Peso4,847.494,834.53 21 
January 31, 2023Colombian Peso4,858.434,834.53 38 
January 31, 2023Colombian Peso4,856.254,834.53 35 
February 28, 2023Indian Rupee83.0582.98 7 
February 28, 2023Pound Sterling1.211.21 33 
February 28, 2023Chilean Peso856.55861.90 76 
April 28, 2023Danish Krone6.93 6.89 58 
April 28, 2023Australian Dollar0.67 0.68 196 
Fair value as of December 31, 2022552
F-79

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

CurrencyForeign currencyNotional foreignFair value assets /
Settlement datefrom contractsrate from contractscurrency rate(liabilities)
January 31, 2024Chilean Peso876.95875.93(10)
February 29, 2024Chilean Peso890.85877.33(120)
February 29, 2024Uruguayan Peso39.3639.37(1)
February 29, 2024Australian Dollar1.461.46(89)
April 3, 2024Danish Krone6.676.72(88)
Fair value as of December 31, 2023(308)
January 31, 2023Chilean Peso920.50858.02(557)
January 31, 2023Chilean Peso919.60 858.02 (550)
January 31, 2023Chilean Peso920.20 858.02 (555)
January 31, 2023Colombian Peso4,774.65 4,831.78 (111)
January 31, 2023Indian Rupee81.92 82.85 (111)
February 28, 2023Colombian Peso4,810.50 4,860.91 (97)
February 28, 2023Mexican Peso19.63 19.69 (23)
Fair value as of December 31, 2022(2,004)

The most frequently applied valuation techniques include forward pricing models. The models incorporate various inputs including: foreign exchange spot, interest rates curves of the respective currencies and the term of the contract.

29.11 Hedge accounting

During the year ended December 31, 2023, the Argentine subsidiary, Sistemas Globales S.A. acquired foreign exchange futures contracts through SBS Sociedad de Bolsa S.A. (SBS) in U.S. dollars, with the purpose of hedging the possible decrease of revenues' expected in Argentine Pesos. The Company designated those futures as hedging instruments in respect of foreign currency risk in cash flow hedges.

These futures contracts have daily settlements, in which the futures value changes daily. Sistemas Globales S.A. recognize daily variations in SBS primary accounts, and the gains or losses generated by each daily position through other comprehensive income. Thus, at the closing of each day, according to the future price of the exchange rate U.S. Dollar – Argentine peso, the companies perceive a gain or loss for the difference. As of December 31, 2023, the accrued valuation of the last day of the month will be settled with the bank in the first day of the next month, so the value recognize in the financial statements is the amount pending to settle with the bank for the last day valuation. As of December 31, 2023 the Company maintained one foreign exchange futures contracts with a maturity date of December 29, 2023 and 1 recognized as Other financial liabilities in the balance sheet.

As of December 31, 2023, the Company has recognized a net loss 38 included in Revenues.
Pursuant to these contracts, Sistemas Globales S.A. is required to maintain collaterals in an amount equal to a percentage of the notional amounts purchased until settlement of the contracts. Sistemas Globales maintained collaterals in Mutual funds in SBS primary account. This ensures minimal funding, in case SBS has to transfer funds to "Mercado a Término de Rosario S.A" (ROFEX) if losses are generated by daily settlements. This amount must also remain restricted during the term of the contracts. As of December 31, 2023, collaterals regarding the transactions are restricted assets for an amount of 218 in Mutual funds included as investments. As of December 31, 2022, the Company did not maintain any futures contracts.

During 2022, certain subsidiaries from Chile, Colombia, India, Brazil, Peru and the United States of America entered into foreign exchange forward and future contracts to manage the foreign currency risk associated with the salaries payable in the local currency of each country. During 2023 the subsidiaries from Chile, Colombia, India, Brazil, Uruguay, United States of America and Mexico entered into foreign exchange forward contracts to manage the foreign currency risk associated with the salaries payable in the local currency of each country The Company designated those derivatives as hedging instruments in
F-80

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

respect of foreign currency risk in cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.

The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated and qualify as cash flow hedges are recognized in other comprehensive income and accumulated under the heading of cash flow hedging reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss, and is included in the ‘finance income’ or ‘finance expense’ line items. Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognized hedged item (i.e. Salaries, employee benefits and social security taxes).

As of December 31, 2023, the Company has recognized a net gain of 21,997 and during the years ended December 31, 2022 and 2021, the Company has recognized a net loss of 2,332 and 136, respectively, included in Salaries, employee benefits and social security taxes and a net gain of 6,604, gain of 1,305 and a net loss of 131, respectively, included in other comprehensive income.

During 2020, Globant, LLC entered into four interest rate swap transactions with the purpose of hedging the exposure to variable interest rate related to the Amended and Restated Credit Agreement with certain financial institutions. By the end of that year the Company chose to discontinue three of the four interest rate swap transaction. During the year ended December 31, 2021, the Company chose to discontinue the remaining interest rate swap since the hedged future cash flows were no longer expected to occur. As of December 31, 2022 and 2021, the Company recognized a loss of 255 and a gain of 132, respectively, included in the line item "Other comprehensive income". The Company designated those derivatives as hedging instruments in respect of interest rate risk in cash flow hedges. Hedges of interest rate risk on recognized liabilities are accounted for as cash flow hedges.

Foreign currency forward contract and interest rate swap assets and liabilities are presented in the line ‘Other financial assets’ and ‘Other financial liabilities’ within the statement of financial position.




























F-81

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

The following table detail the foreign currency forward contracts outstanding as of December 31, 2023:

Hedging instruments - Outstanding contracts
CurrencyForeign currencyNotional foreignFair value assets /
Settlement datefrom contractsrate from contractscurrency rate(liabilities)
January 25, 2024Indian Rupee83.5383.299 
January 25, 2024Indian Rupee83.5383.296 
January 31, 2024Uruguayan Peso40.5539.22127 
January 31, 2024Mexican Peso18.3017.05504 
January 31, 2024Colombian Peso4,314.50 3,849.10 1,129 
January 31, 2024Colombian Peso4,445.50 3,850.40 1,366 
January 31, 2024Chilean Peso923.00876.27 263 
January 31, 2024Brazilian Real5.184.87187 
February 27, 2024Indian Rupee83.6483.399 
February 27, 2024Indian Rupee83.6483.396 
February 29, 2024Uruguayan Peso40.3039.6187 
February 29, 2024Mexican Peso18.7817.16639 
February 29, 2024Colombian Peso4,415.71 3,875.77 800 
February 29, 2024Chilean Peso924.70877.77264 
February 29, 2024Colombian Peso4,074.90 3,869.88 263 
February 29, 2024Colombian Peso4,177.65 3,871.87 479 
February 29, 2024Brazilian Real5.214.89197 
March 26, 2024Indian Rupee83.5583.473 
March 26, 2024Indian Rupee83.5483.472 
March 27, 2024Mexican Peso18.8317.24625 
March 27, 2024Colombian Peso4,440.00 3,901.25 794 
March 27, 2024Chilean Peso935.50879.35312 
April 25, 2024Indian Rupee83.7083.623 
April 25, 2024Indian Rupee83.7083.622 
April 25, 2024Indian Rupee83.72 83.62 2
Fair value as of December 31, 20238,078 
January 31, 2023Brazilian Real5.365.25 55 
January 31, 2023Chilean Peso995.20858.02789 
March 31, 2023Chilean Peso994.25866.45685 
April 28, 2023Colombian Peso5,161.254,919.18283 
April 28, 2023Colombian Peso5,160.004,918.15388 
February 28, 2023Chilean Peso992.20861.47708 
January 31, 2023Indian Rupee83.6683.1542 
February 23, 2023Indian Rupee83.1582.986 
February 23, 2023Indian Rupee83.01 82.98 1 
Fair value as of December 31, 20222,957 
F-82

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

CurrencyForeign currencyNotional foreignFair value assets /
Settlement datefrom contractsrate from contractscurrency rate(liabilities)
January 25, 2024Argentine Peso560.00808.48(1)
January 25, 2024Indian Rupee83.2183.28(2)
Fair value as of December 31, 2023(3)
CurrencyForeign currencyNotional foreignFair value assets /
Settlement datefrom contractsrate from contractscurrency rate(liabilities)
January 31, 2023Colombian Peso4,667.504,834.53(486)
January 31, 2023Indian Rupee82.5482.85(26)
February 23, 2023Indian Rupee82.0382.98(11)
February 28, 2023Colombian Peso4,659.504,860.91(580)
March 30, 2023Colombian Peso4,729.004,888.69(452)
April 26, 2023Indian Rupee83.0483.30(9)
April 26, 2023Indian Rupee83.0183.30(7)
Fair value as of December 31, 2022(1,571)
During the year ended December 31, 2022, Globant LLC entered into equity forward contracts to manage the risk associated with the volatility of the Company's market share price use to determine the cash-settled shared based plan. The Company designated those derivatives as hedging instruments in respect of market share price risk in cash flow hedges. Hedges of cash-settled share base payment risk on firm commitments are accounted for as cash flow hedges.
Since the Company separates the forward element and the spot element of the forward contract and designates as the hedging instrument only the change in the value of the spot element of the forward contract, the effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated and qualify as cash flow hedges is recognized in other comprehensive income and accumulated under the heading of cash flow hedging reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge, except for the portion that affects comprehensive income for the granted shares in which the rendering of services over time lapse has already occur to the date of report. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss, and is included in the "other financial results, net" line item. Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognized hedged item (i.e., Sharebased compensation expense).
As of December 31, 2023 and 2022, the Company recognized a gain of 575 and a loss of 1,341, respectively, included in the line item "Share-based compensation expense - Cash settle", a gain of 2,362 and a loss of 2,528, respectively, included in the line item "Gains and losses on cash flow hedges", from other comprehensive income and as of December 31, 2023 and 2022 a financial loss of 492 and 17, respectively, included in the line item "Net loss arising from financial assets measured at fair value through OCI".
CurrencyForwardFair value assets /
Settlement datefrom contractsPrice(liabilities)
June 3, 2024US dollars198.85188 
June 2, 2025US dollars208.72189 
June 1, 2026US dollars219.34181 
Fair value as of December 31, 2023558 
F-83

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

CurrencyForwardFair value assets /
Settlement datefrom contractsPrice(liabilities)
June 3, 2024US dollars289.90(393)
June 2, 2025US dollars302.36(383)
June 1, 2026US dollars315.09(391)
Fair value as of December 31, 2023(1,167)
CurrencyForwardFair value
Settlement datefrom contractsPriceassets / (liabilities)
June 1, 2023US dollars278.24(910)
June 1, 2023US dollars188.83(71)
June 3, 2024US dollars289.9(886)
June 3, 2024US dollars198.85(70)
June 2, 2025US dollars302.36(890)
June 2, 2025US dollars208.72(75)
June 1, 2026US dollars315.09(901)
June 1, 2026US dollars219.34(83)
Fair value as of December 31, 2022(3,886)

NOTE 30 — CAPITAL AND RESERVES

30.1 Issuance of common shares

During the year ended December 31, 2023, 145,630 common shares were issued after vested options arising from the 2012 and 2014 share-based compensation plan were exercised by some employees. Options were exercised at an average price of 28.18 per share amounting to a total of 4,103.

During the year ended December 31, 2023, 378,323 Restricted Stock Units (RSU) were granted to certain employees and directors of the Company and 257,079 RSU's were vested at an average price of 167.22 per share amounting to a total of 42,989 (non-cash transactions).

During the year ended December 31, 2023, no Stock-Equivalent Units (SEU) were granted to employees and directors of the Company and 4,524 SEU's were vested at an average price 191.76 per share amounting to a total of 868 (non-cash transactions).

During the year ended December 31, 2023 the Company’s common shares issues in connection with subscriptions agreements related to acquisitions were as follows:

DateAcquired companyCommon sharesAmount
January 13, 2023Cloudshift17,443 3,068 
March 30, 2023Navint9,087 1,492 
April 1, 2023Navint416 68 
April 20, 2023Experience IT29,120 4,521 
May 15, 2023Xappia6,242 1,000 
July 21, 2023Walmeric6,730 1,119 
July 25, 2023Pentalog177,505 32,320 
October 5, 2023Atix4,601 850 
October 20, 2023GUT152,617 28,223 
TOTAL403,761 72,661 

F-84

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

During the year ended December 31, 2022, 94,380 common shares were issued after vested options arising from the 2012 and 2014 share-based compensation plan were exercised by certain employees. Options were exercised at an average price of 37.17 per share amounting to a total of 3,508.

During the year ended December 31, 2022, 801,041 RSUs were granted to certain employees and directors of the Company and 266,300 RSUs were vested at an average price of 122.29 per share amounting to a total of 32,566 (non-cash transaction).

During the year ended December 31, 2022 the Company’s common shares issues in connection with subscriptions agreements related to acquisitions were as follows:

DateAcquired companyCommon sharesAmount
April 29, 2022Cloudshift8,761 2,251 
June 7, 2022Genexus21,328 4,947 
August 5, 2022Atix4,534 850 
September 16, 2022Grupo Assa34,754 7,224 
September 23, 2022Sysdata19,640 4,052 
November 7, 2022KTBO9,624 1,540 
November 16, 2022eWave32,524 5,859 
November 18, 2022Vertic41,252 7,312 
December 21, 2022Adbid10,728 1,821 
TOTAL183,145 35,856 

During the year ended December 31, 2021, 213,686 common shares were issued after vested options arising from the 2012 and 2014 share-based compensation plan were exercised by some employees. Options were exercised at an average price of 30.93 per share amounting to a total of 6,612.

During the year ended December 31, 2021, 168,669 RSUs were granted to certain employees and directors of the Company and, 235,392 RSUs were vested at an average price of 89.18 per share amounting to a total of 20,992 (non-cash transaction).

During the year ended December 31, 2021 the Company’s common shares issues in connection with subscriptions agreements related to acquisitions were as follows:

DateAcquired companyCommon sharesAmount
March 15, 2021Xappia8,415 1,750 
May 11, 2021
Hybrido (*)
10,088 2,149 
July 8, 2021Walmeric10,842 2,372 
November 17, 2021Xappia2,502 750 
November 30, 2021Navint7,032 2,100 
TOTAL38,879 9,121 
(*) As part of the subscription agreement the Company recognized 2,152 as equity settled agreement, related to common shares that the Company will issue in the future.

30.2 Public offerings and agreements

On May 28 2021, 1,380,000 common shares were issued and sold at a price of 214 for a net proceeds of 286,207, which were listed on the New York Stock Exchange. Cost associated with the proceed consisted of agents commissions, legal and professional fees and listing fees.

As of December 31, 2023, 41,393,201 common shares of the Company's share capital are registered with the SEC and quoted in the New York Stock Exchange.

F-85

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

30.3 Cash flow hedge reserve

The movements in the cash flow hedge reserve were as follows:
Foreign currency risk
20232022
Balance at beginning of the year(3,171)11 
Gain (Loss) arising on changes in fair value of hedging instruments during the period13,740 (2,682)
Loss reclassified to profit or loss – hedged item has affected profit or loss(1,242)(500)
Balance at end of the year9,327 (3,171)

NOTE 31 — APPROPRIATION OF RETAINED EARNINGS UNDER PRINCIPAL OPERATING SUBSIDIARIES´ LOCAL LAWS AND RESTRICTIONS ON DISTRIBUTION OF DIVIDENDS

Under local laws, the subsidiaries of the Company located in the following countries must appropriate at least the percentage of net income of each year described below to a legal reserve, until such reserve equals the cap percentage of its share capital described in each case.

Country % of yearly net income % of capital
Luxembourg, Moldova and France5%10%
Argentina, Uruguay, Mexico, Italy, Portugal and Romania5%20%
Spain and Peru10%20%
China10%50%

The Company’s Belorussian subsidiaries must allocate an amount of up to 25% of the annual payroll to a reserve fund for salaries.

As at December 31, 2023, the statutory reserves of the following entities are not yet fully integrated: IAFH Globant Mexico IT S. de R.L. de C.V., Globant Peru S.A.C., Software Product Creation S.L. and Sport Reinvention Entertainment Group S.L.

Pursuant to its pertaining by-laws, Sistemas Colombia S.A.S. and Procesalab S.A.S. must allocate at least 10% of the net income of the year to a special reserve until such reserve equals 50% of its share capital; Globant Arabia Ltd. must allocate at least 10% of the net profits of the year to a special reserve until such reserve equals 30% of its share capital; and Pentalog Vietnam Company Ltd. must allocate the following percentages of its annual profits after payment of its financial obligations with relevant authorities, to the following special reserves: 5% until reaching 10% of its share capital to a supplemental charter capital; 5% to a business development special reserve, and 5% to a bonus and welfare special reserve.

NOTE 32 – OTHER EVENTS

32.1 Cybersecurity Event

On March 28th, 2022, the Company detected an unauthorized access to certain source code and project-related documentation for certain clients, as well as certain data files. As soon as such access was detected, the Company activated its security protocols and began conducting an exhaustive investigation. While we do not anticipate a significant adverse economic impact resulting from the incident, as of the date of issuance of these consolidated financial statements, there is still some level of uncertainty.
NOTE 33 – SUBSEQUENT EVENTS
 
The Company has evaluated subsequent events until February 29, 2024, date of approval of these consolidated financial statements, to assess the need for potential adjustments or disclosures in these consolidated financial statements in accordance with IAS 10 "Events after the reporting period". The Company doesn't have any subsequent events to report.

F-86

GLOBANT S.A.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023 and 2022 and for the three years in the period ended December 31, 2023
(amounts are expressed in thousands of U.S. dollars, except where expressly indicated that amounts are stated in thousands of other currencies)

NOTE 34 – APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS
 
The Consolidated Financial Statements were approved by the Board of Directors on February 29, 2024. 
 

Martín Migoya
President 
F-87