F-1/A 1 v383492_f1a.htm F-1/A

As filed with the Securities and Exchange Commission on July 15, 2014

Registration No. 333-190841

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



 

Amendment No. 7 to

Form F-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



 

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   7371   Not Applicable
(State or other jurisdiction
of incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification Number)

5 rue Guillaume Kroll
L-1882, Luxembourg
Tel: + 352 48 18 28 1

(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)



 

Globant, LLC
875 Howard Street, Suite 320
San Francisco, CA 94103
Attn: Andrés Angelani
Tel: +1 877 798 8104 ext. 28127

(Name, address, including zip code and telephone number,
including area code, of agent for service)



 

Copies to:

 
Christopher C. Paci
DLA Piper LLP (US)
1251 Avenue of the Americas
New York, New York 10020-1104
(212) 335-4500
  S. Todd Crider
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017-3954
(212) 455-2000


 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, please check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

 

 


 
 

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CALCULATION OF REGISTRATION FEE

   
Title of Each Class of Securities to Be Registered   Proposed
Maximum Aggregate
Offering Price(1)(2)
  Amount of
Registration Fee
Common shares, nominal value $1.20 per share   $ 94,185,000     $ 12,131 (3) 

(1) Estimated solely for the purpose of determining the amount of the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended.
(2) Includes common shares subject to the underwriters’ option to purchase additional common shares.
(3) Previously paid.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.


 
 

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The information in this prospectus is not complete and may be changed. Neither we nor the selling shareholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 
PRELIMINARY PROSPECTUS   Subject to Completion, dated July 15, 2014

6,300,000 Common Shares

[GRAPHIC MISSING]

Common Shares



 

This is an initial public offering of common shares of Globant S.A. Globant S.A. is issuing and selling 3,400,000 common shares and the selling shareholders named in this prospectus are selling a total of 2,900,000 common shares. Globant S.A. will not receive any proceeds from the sale of common shares to be offered by the selling shareholders.



 

Prior to this offering, there has been no public market for the common shares. It is currently estimated that the initial public offering price per common share will be between $11.00 and $13.00. We have been authorized to list our common shares on the New York Stock Exchange (“NYSE”) under the symbol “GLOB.”



 

Investing in our common shares involves risks that are described under “Risk Factors” beginning on page 16.



 

   
  Per common
share
  Total
Initial public offering price                  
Underwriting discounts and commissions(1)                  
Proceeds, before expenses, to us                  
Proceeds, before expenses, to the selling shareholders                  

(1) We have agreed to reimburse the underwriters for certain expenses in connection with this offering. See “Underwriting.”

Certain of the selling shareholders have granted the underwriters an option, for a period of 30 days from the date of this prospectus, to purchase up to a total of 945,000 additional common shares from those selling shareholders to cover over-allotments, if any.

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”).

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver our common shares to investors on or about       , 2014.

   
J.P. Morgan   Citigroup   Credit Suisse


 

   
William Blair        Cowen and Company

LOYAL3 Securities

                       , 2014


 
 


 
 


 
 


 
 

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None of us, the selling shareholders, or the underwriters (or any of our or their respective affiliates) have authorized anyone to provide any information other than that contained in this prospectus or in any free writing prospectus prepared by us or on our behalf or to which we have referred you. None of us, the selling shareholders or the underwriters (or any of our or their respective affiliates) takes any responsibility for, and can provide no assurance as to the reliability of any other information that others may give you. We, the selling shareholders, and the underwriters (or any of our or their respective affiliates) are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is only accurate as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.



 

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SUMMARY

This summary highlights key aspects of the information contained elsewhere in this prospectus. Because it is a summary, it does not contain all of the information that you should consider before making an investment decision regarding our common shares. You should read the entire prospectus carefully, including “Risk Factors” and the financial statements and the accompanying notes to those statements. Unless the context requires otherwise, references in this prospectus to “Globant,” “we,” “us” and “our” refer to Globant S.A., a société anonyme incorporated under the laws of the Grand Duchy of Luxembourg, and its subsidiaries.

Our Company

We are a new-breed of technology services provider focused on delivering innovative software solutions that leverage emerging technologies and related market trends. We combine the engineering and technical rigor of IT services providers with the creative approach and culture of digital agencies. Globant is the place where engineering, design and innovation meet scale. Our principal operating subsidiary is based in Buenos Aires, Argentina. Our clients are principally located in North America and Europe and for the three months ended March 31, 2014, 79.9% of our revenues were generated by clients in North America and 7.1% of our revenues were generated by clients in Europe, including many leading global companies.

Over the last several years, a number of new technologies and related market trends, including mobility, cloud computing and software as a service, gamification, social media, wearables, internet of things and “big data” have emerged that are revolutionizing the way end-users interface with information technology and are reshaping the business and competitive landscape for enterprises. As enterprises adjust their business models to adapt and benefit from these changes, they are increasingly seeking solutions that not only meet the rigorous engineering requirements of emerging technologies, but that also engage the end-user in new and powerful ways. We believe this dynamic is creating an attractive opportunity for technology service providers that have the engineering rigor, creative talent, and culture of innovation to deliver these solutions.

At Globant, we seek to deliver an optimal blend of engineering, design, and innovation to harness the potential of emerging technologies to meet our clients’ business needs. Since our inception in 2003, we have believed that while engineering is central to information technology, only by combining strong engineering capabilities with creativity and agility can we deliver innovative solutions that enhance end-user experiences while meeting our clients’ business needs. Our commitment to this differentiated approach is reflected in three core tenets of our company: organization by technology-specialized practices called Studios; emphasis on a collaborative and open Culture; and Innovation and creativity in technology and design. To contribute to these core concepts, we have made and continue to make significant ongoing investments in developing an operating environment that fosters innovation, creativity and teamwork, while ensuring a commitment to quality and project discipline.

Our employees, whom we call Globers, are our most valuable asset. As of March 31, 2014, we had 3,322 employees and 25 delivery centers across 16 cities in Argentina, Uruguay, Colombia, Brazil, Mexico and the United States, supported by four client management locations in the United States, and one client management location in each of the United Kingdom, Colombia, Uruguay, Argentina and Brazil. Our reputation for cutting-edge work for global blue chip clients and our footprint across Latin America provide us with the ability to attract and retain well-educated and talented professionals in the region. We are culturally similar to our clients and we function in similar time zones. We believe these similarities have helped us build solid relationships with our clients in the United States and Europe and facilitate a high degree of client collaboration.

Our clients include companies such as Google, Electronic Arts, JWT, Sabre, LinkedIn, Orbitz and Walt Disney Parks and Resorts Online, each of which were among our top ten clients by revenues for at least one Studio in 2013. We believe our success in building our attractive client base in the most sophisticated and competitive markets for IT services demonstrates the value proposition of our offering and the quality of our execution as well as our culture of innovation and entrepreneurial spirit.

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Our revenues increased from $90.1 million for 2011 to $158.3 million for 2013, representing a compounded annual growth rate (“CAGR”) of 32.5% over the three-year period. Our revenues for 2013 increased by 22.9% to $158.3 million, from $128.8 million for 2012. Our profit for 2013 was $13.8 million, compared to a loss of $1.3 million for 2012, which loss principally reflected $9.3 million in share-based compensation expense, net of deferred tax, in 2012. The $15.1 million increase in profit from 2012 to 2013 includes a $29.6 million gain from transactions with Bonos del Gobierno Nacional en Dólares Estadounidenses (“BODEN”) received as payment for the exports of a portion of the services performed by our Argentine subsidiaries, partially offset by a $9.6 million allowance for the impairment of tax credits generated by Argentina’s Law No. 25,922 (Ley de Promoción de la Industria de Software), as amended by Law No. 26,692 (the “Software Promotion Law”). See note 3.7.1.1 to our audited consolidated financial statements for the year ended December 31, 2013. After the approximately 23% devaluation of the Argentine peso that occurred in January 2014, our U.S. subsidiary discontinued its use of BODEN transactions as payment for exports of a portion of the services performed by our Argentine subsidiaries. Our revenues for the three months ended March 31, 2014 were $43.1 million, an increase of $8.7 million, or 25.3%, compared to the three months ended March 31, 2013. We recorded a profit of $3.4 million for the three months ended March 31, 2014, compared to a profit of $2.4 million for the three months ended March 31, 2013. In 2011, 2012 and 2013, we made several acquisitions to enhance our strategic capabilities, none of which contributed a material amount to our revenues in the year the acquisition was made. See “— Corporate History.”

Our Market Opportunity

In the last few years, the technology industry has undergone a significant transformation due to the proliferation and accelerated adoption of several emerging technologies, including mobility, social media, big data and cloud computing, and related market trends, including enhanced user experience (“UX”), personalization technology, gamification, consumerization of IT, wearables, internet of things and open collaboration. These technologies are empowering end-users and compelling enterprises to engage and collaborate with end-users in new and powerful ways. We believe that these changes are resulting in a paradigm shift in the technology services industry and are creating demand for service providers that possess a deep understanding of these emerging technologies and related market trends.

We believe that enterprises seeking to adapt to these emerging technologies and related market trends represent a significant growth opportunity for technology services providers. However, in order to successfully capture this opportunity, technology services providers require a new set of skills and capabilities — domain knowledge, a deep understanding of emerging technologies and related market trends and the ability to integrate creative capabilities with engineering rigor. Historically, traditional IT services providers have focused on optimizing their clients’ corporate processes by delivering custom applications based on detailed client specifications, while digital agencies have emphasized creativity but without the depth of engineering expertise or ability to scale. We believe that these dynamics have created a need for a new breed of technology services provider, like ourselves, with superior innovation capabilities supported by highly evolved methodologies, engineering capabilities, talent management practices and a strong culture.

According to IDC, the IT services market worldwide was estimated to be $874.8 billion in 2012 and is projected to grow to $1,087.3 billion by 2017, representing a five-year CAGR of 4.4%. However, the accelerated adoption of the new technologies described above suggests that demand for IT services focused on these technologies is likely to grow at rates that outpace the growth of the overall IT services market worldwide. For example, according to IDC, worldwide spending on professional services related to implementing cloud services was $7.5 billion in 2012 and is expected to grow to $22.6 billion by 2017, a five-year CAGR of 24.8%. According to the same source, the mobile enterprise application platform market was $0.9 billion in 2012 and is expected to grow to $4.8 billion by 2017, a five-year CAGR of 38.7%. Finally, according to Gartner, worldwide social media revenue (consisting of revenues from advertising, gaming and subscriptions) was estimated at $11.8 billion in 2011 and is expected to grow to $33.5 billion by 2016, a five-year CAGR of 23.0%. The growth in demand for technology services by enterprises seeking to adapt their business models to these emerging technologies and related market trends represents our market opportunity.

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Our Approach

We seek to deliver an optimal blend of engineering, design, and innovation capabilities to harness the potential of emerging technologies to meet our clients’ business needs. Our value proposition for our clients includes increased revenues, brand awareness, effective communication with customers, and the optimal use of emerging technologies and resources to enable our clients to maintain their leadership position. Our integrated approach requires high-quality software engineering talent, advanced knowledge of emerging technologies, use of the latest software development methodologies and productivity tools, and well-tested project management practices. Most importantly, we believe it calls for a work environment that fosters innovation, creativity and teamwork while ensuring a commitment to quality, delivery and discipline. The three core tenets of our approach are:

Studios.  We organize around core competencies in cutting-edge technologies and call these practices Studios. We currently have 12 Studios: Consumer Experience; Gaming; Big Data and High Performance; Quality Engineering; Enterprise Consumerization; UX and Social; Mobile; Wearables and Internet of Things; After Going Live; Digital Content; Product Innovation; and Cloud Computing and Infrastructure. We believe that our Studio model, in contrast to industry segmentation typical of most IT services firms, allows us to optimize our expertise in emerging technologies and related market trends for our clients, regardless of their industry. Each Studio serves multiple industries and our work for individual clients frequently involves Globers from multiple Studios organized into small teams that we call “Agile Pods.”
Culture.  Our culture is entrepreneurial, flexible, and team-oriented. Our culture is founded on three motivational pillars (Autonomy, Mastery and Purpose) and six core values (Act Ethically, Be a Team Player, Constantly Innovate, Aim for Excellence, Think Big and Have Fun). We believe that we have been successful in building a work environment that fosters creativity, innovation and collaborative thinking, as well as enabling our Globers to tap into their intrinsic motivation for the benefit of our company and our clients.
Innovation.  We actively seek to promote and sustain innovation among our Globers through “ideation” sessions, our Globant Labs, “flip-thinking” events, hackathons and through the cross-pollination of knowledge and ideas.

Competitive Strengths

We believe the following strengths differentiate Globant and create the foundation for continued rapid growth in revenues and profitability:

Ability to deliver a distinctive blend of engineering, design and innovation services focused on enhancing the end-user’s experience
Deep domain expertise in emerging technologies and related market trends
Long-term relationships with blue chip clients
Global delivery with access to deep talent pool
Highly experienced management team

Strategy

We seek to be a leading provider of integrated engineering, design and innovation services across a range of industries that leverages our deep competencies in emerging technologies and knowledge of related market trends. The key elements of Globant’s strategy for achieving this objective are as follows:

Grow revenue with existing and new clients
Remain at the forefront of innovation and emerging technologies
Expand our delivery footprint
Attract, train and retain top-quality talent
Selectively pursue strategic acquisitions

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Recent Developments

Acquisition of The Huddle Group

On October 11, 2013, we entered into several definitive agreements relating to our acquisition of Huddle Investment LLP (“Huddle Investment”), a company organized under the laws of England, and its subsidiaries in Argentina, Chile and the United States (collectively, the “Huddle Group”) for a total purchase price of up to $9.3 million. On October 18, 2013, we completed the purchase of a majority interest in the Huddle Group, as described in more detail below.

With a team of 156 employees, the Huddle Group focuses on offering innovative and agile software solutions for leading companies primarily in the media and entertainment industries. The Huddle Group specializes in providing services such as application development, testing, infrastructure management, application maintenance and outsourcing, among others. This acquisition advances our strategy of becoming a global leader in the creation of innovative software products by focusing on new technologies and trends such as gaming, mobile, cloud computing, social media, wearables, internet of things and big data.

On October 18, 2013, we purchased from Pusfel S.A. (“Pusfel”) and ACX Partners One LP (“ACX”), two of the three equityholders in Huddle Investment, an 86.25% equity interest in Huddle Investment, pursuant to a stock purchase agreement dated October 11, 2013 (the “majority interest purchase agreement”). The majority interest purchase agreement provides for a cash purchase price of up to $8.0 million payable to the sellers in seven installments, subject to certain adjustments described below, and an additional amount of $0.4 million in consideration of excess cash. In addition, on October 11, 2013, we also entered into a stock purchase agreement with Gabriel Spitz (the “minority interest purchase agreement”), the president and chief executive officer of Huddle Group Corp. (“Huddle US”), a subsidiary of Huddle Investment, to purchase the remaining 13.75% equity interest in Huddle Investment. The minority interest purchase agreement provides for payment of consideration by us of up to $1.3 million in three installments in the form of newly issued Globant common shares.

For additional information about the majority interest purchase agreement, the minority interest purchase agreement and related documents, see “Recent Developments.”

Risk Factors

Before you invest in our common shares, you should carefully consider all the information in this prospectus, including the information set forth under “Risk Factors.” We believe our primary challenges are:

If we are unable to maintain 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, we may not have the necessary resources to maintain client relationships, and competition for such IT professionals could materially adversely affect our business, financial condition and 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.
If we are unable to effectively manage our rapid growth, our management personnel, systems and resources could face significant strains, which could adversely affect our results of operations. We may not be able to achieve anticipated growth, which could materially adversely affect our revenues, results of operations, business and prospects.
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 operation 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 results of operations to suffer.

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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 derive a significant portion of our revenues from clients located in the United States and, to a lesser extent, Europe. Worsening general economic conditions in the United States, Europe or globally could materially adversely affect our revenues, margins, results of operations and financial condition.
Uncertainty concerning the instability in the current economic, political and social environment in Argentina may have an adverse impact on capital flows and could adversely affect our business, financial condition and results of operations.
Argentina’s regulations on proceeds from the export of services may increase our exposure to fluctuations in the value of the Argentine peso, which, in turn, could have an adverse effect on our operations and the market price of our common shares. The imposition in the future of additional regulations on proceeds collected outside Argentina for services rendered to non-Argentine residents or of export duties and controls could also have an adverse effect on us.
Our greater than 5% shareholders, directors and executive officers and entities affiliated with them will beneficially own approximately 77.78% of our outstanding common shares after this offering, which includes approximately 18.48%, 22.90% and 14.05% of our outstanding common shares after this offering which will be owned by affiliates of WPP, Riverwood Capital and FTV Capital, respectively. These insiders will therefore continue to have substantial control over us after this offering and could prevent new investors from influencing significant corporate decisions, such as approval of key transactions, including a change of control.

Corporate History

We were founded in 2003 by Martín Migoya, our Chairman and Chief Executive Officer, Guibert Englebienne, our Chief Technology Officer, Martín Umaran, our Chief of Staff, and Nestor Nocetti, our Executive Vice President of Corporate Affairs. Our founders’ vision was to create a company, starting in Latin America, that would become a leader in the delivery of innovative software solutions for global clients, while also generating world-class career opportunities for IT professionals, not just in metropolitan areas but also in outlying cities within countries in the region.

Since our inception, we have benefited from strong organic growth, have built a blue chip client base and have substantially expanded our network of delivery centers. We have also benefited from the support of our investors Riverwood Capital, FTV Capital, Endeavor Global, Inc. and, more recently, WPP.

In 2006, we started working with Google. We were chosen due to our cultural affinity and innovation. While our growth has largely been organic, since 2008 we have made five complementary acquisitions focused on deepening our relationship with key clients, extending our technology capabilities, broadening our service offering and expanding our geographic footprint, rather than building scale. In 2008, we acquired IAFH Global S.A. (“Accendra”), a Buenos Aires-based provider of software development services, to deepen our relationship with Microsoft and broaden our technology expertise to include SharePoint and other Microsoft technologies. That same year, we also acquired The Alterna Group, S.A. (“Openware”), a company specializing in security management based in Rosario, Argentina. In 2011, we acquired Nextive Solutions LLC, a San Francisco-based mobile applications company, and its affiliated company Tecnologia Social S.A. (which we refer to together as “Nextive”), which expanded our geographic presence in the United States and enhanced our U.S. engagement and delivery management team as well as our ability to provide comprehensive solutions in mobile technologies. In 2012, we acquired TerraForum Consultoria Ltda. (“TerraForum”), an innovation consulting and software development firm in Brazil. In October 2013, we acquired a majority stake in the Huddle Group, a company specializing in the media and entertainment industries, with operations in Argentina, Chile and the United States. See “— Recent Developments.”

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Current 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 and the issuer in this offering. Prior to the incorporation in Luxembourg, our company was incorporated in Spain as a sociedad anónima, which we refer to as “Globant Spain.” As a result of the incorporation of our company in Luxembourg and certain related share transfers and other transactions, Globant Spain, which we refer to as “Spain Holdco,” became a wholly-owned subsidiary of our company. See note 1.1 to our audited consolidated financial statements for more information about the reorganization and related transactions.

The following chart reflects our organization structure, including our principal shareholders and our principal subsidiaries, as of May 31, 2014. See “Principal and Selling Shareholders” for more information about our principal shareholders and note 2.2 to our audited consolidated financial statements for more information about our consolidated subsidiaries.

[GRAPHIC MISSING]

Corporate Information

Our principal corporate offices are located at 5 rue Guillaume Kroll, L-1882, Luxembourg and our telephone number is + 352 48 18 28 1. We maintain a website at http://www.globant.com. Our website and the information accessible through it are not incorporated into this prospectus or the registration statement of which it forms a part.

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THE OFFERING

Common shares offered by us    
    3,400,000 common shares.
Common shares offered by the selling shareholders    
    2,900,000 common shares.
Total offering    
    6,300,000 common shares.
Common shares to be outstanding after this offering    
    32,395,158 common shares.
Offering price    
    We expect that the initial public offering price per common share will be between $11.00 and $13.00.
Over-allotment option    
    The underwriters have an option to purchase up to a total of 945,000 additional common shares from certain of the selling shareholders to cover over-allotments, if any. The underwriters can exercise this option at any time within 30 days from the date of this prospectus.
Use of proceeds    
    We estimate that the net proceeds to us from this offering will be approximately $33.2 million, assuming an initial public offering price of $12.00 per common share (the midpoint of the range set forth on the cover page of this prospectus), after deducting estimated underwriting discounts and commissions and estimated offering expenses. Each $1.00 increase (decrease) in the public offering price per common share would increase (decrease) our net proceeds, after deducting estimated underwriting discounts and commissions and estimated offering expenses, by $3.2 million. We intend to use the net proceeds we receive from this offering to repay indebtedness, for capital expenditures, for future strategic acquisitions of, or investments in, other businesses or technologies that we believe will complement our current business and expansion strategies and for general corporate and working capital purposes. Notwithstanding the foregoing, we have no specific allocation for the use of the net proceeds to us from this offering, and our management retains the right to utilize the net proceeds as it determines.
    We will not receive any of the proceeds from the sale of common shares by the selling shareholders.
Dividend policy    
    We do not anticipate paying any dividends on our common shares in the foreseeable future. See “Dividend Policy.”
Voting rights    
    Holders of our common shares are generally entitled to one vote per common share on all matters.
    Immediately following this offering, our public shareholders will have 18.8% of the voting rights in Globant, or 21.7% if the underwriters exercise in full their option to subscribe and/or purchase additional common shares. See “Description of Common Shares.”
NYSE symbol    
    “GLOB.” Our common shares will not be listed on any exchange or otherwise quoted for trading in Luxembourg.
Lock-up    
    We, the selling shareholders, our other shareholders, certain share option holders and our directors and officers have agreed that, subject to certain exceptions, we and they will not offer, pledge, sell, announce the intention to sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or publicly disclose our

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    intention to make any issue, offer, sale, pledge, disposition or filing, without the prior written consent of the representatives, for a period of 180 days after the date of this prospectus or, in our case, file or cause to be filed with the Securities and Exchange Commission (the “SEC”) a registration statement relating to, any of our common shares, other share capital, or securities convertible into or exchangeable or exercisable for any of our common shares or other share capital. See “Underwriting.”
LOYAL3 platform    
    At our request, the underwriters have reserved up to 2.0% of the common shares to be sold by us in this offering to be offered through the LOYAL3 platform at the initial public offering price. See “Underwriting.”
Risk factors    
    See “Risk Factors” beginning on page 16 of this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common shares.

Unless otherwise indicated, the number of common shares outstanding after closing date of this offering is based on common shares outstanding as of March 31, 2014 and excludes:

1,350,616 common shares issuable upon the exercise of share options outstanding as of March 31, 2014 under share option agreements entered into with certain of our key employees and directors, with a weighted average exercise price of $3.8927 per share;
83,803 common shares issuable upon the exercise of share options outstanding as of March 31, 2014 under share option agreements entered into with Endeavor Global, Inc. and Omidyar Network Fund Inc., with a weighted average exercise price of $6.4077 per share; and
1,666,667 common shares reserved for issuance under the 2014 Equity Incentive Plan that we intend to adopt in connection with the completion of this offering. We intend to grant, conditional upon the closing of this offering, share options to purchase 586,583 common shares to members of our senior management and our employees under the terms of our 2014 Equity Incentive Plan.

Unless otherwise indicated, this prospectus assumes:

a one-to-12 reverse share split to be effected prior to the pricing of this offering;
an initial public offering price of $12.00 per common share, the midpoint of the price range set forth on the cover of this prospectus; and
no exercise of the underwriters’ option to purchase up to 945,000 additional common shares from certain of the selling shareholders to cover over-allotments, if any.

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SUMMARY CONSOLIDATED FINANCIAL DATA

The following summary consolidated financial and other data of Globant S.A. should be read in conjunction with, and are qualified by reference to, “Operating and Financial Review and Prospects” and our audited consolidated financial statements and notes thereto included elsewhere in this prospectus. The summary consolidated financial data as of December 31, 2013 and 2012 and for the years ended December 31, 2013, 2012 and 2011 are derived from the audited consolidated financial statements of Globant S.A. included elsewhere in this prospectus and should be read in conjunction with those audited consolidated financial statements and notes thereto. Our summary consolidated financial data as of December 31, 2011 set forth below was derived from our audited consolidated financial statements for the year ended December 31, 2012, which are not included in this prospectus. The selected consolidated financial data as of March 31, 2014 and for the three months ended March 31, 2014 and 2013 are derived from the unaudited condensed interim consolidated financial statements of Globant S.A. included elsewhere in this prospectus and should be read in conjunction with those unaudited condensed interim consolidated financial statements and notes thereto. The unaudited condensed interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of our management, include all normal recurring adjustments necessary for a fair presentation of the information set forth therein. Our historical results are not necessarily indicative of the results that may be expected for the year ending December 31, 2014 or any other future period.

         
  Three months ended
March 31,
  Year ended
December 31,
     2014   2013   2013   2012   2011
     (in thousands,
except for percentages and per share data)
  (in thousands,
except for
percentages and per
share data)
Consolidated Statements of profit or loss and other comprehensive income:
                                            
Revenues   $ 43,125     $ 34,351     $ 158,324     $ 128,849     $ 90,073  
Cost of revenues(1)     (26,359 )      (22,076 )      (99,603 )      (80,612 )      (53,604 ) 
Gross profit     16,766       12,275       58,721       48,237       36,469  
Selling, general and administrative expenses(2)     (12,941 )      (11,567 )      (54,841 )      (47,680 )      (26,538 ) 
Impairment of tax credits     (416 )            (9,579 )             
Profit (Loss) from operations     3,409       708       (5,699 )      557       9,931  
Gain on transaction with bonds(3)     2,606       3,107       29,577              
Finance income     4,516       123       4,435       378        
Finance expense     (5,458 )      (862 )      (10,040 )      (2,687 )      (1,151 ) 
Finance expense, net(4)     (942 )      (739 )      (5,605 )      (2,309 )      (1,151 ) 
Other income and expenses, net(5)     (33 )            1,505       291       (3 ) 
Profit (Loss) before income tax     5,040       3,076       19,778       (1,461 )      8,777  
Income tax(6)     (1,616 )      (687 )      (6,009 )      160       (1,689 ) 
Profit (Loss) for the period/year   $ 3,424     $ 2,389     $ 13,769     $ (1,301 )    $ 7,088  
Earnings (Loss) per share:
                                      
Basic(7)   $ 0.12     $ 0.08     $ 0.50     $ (0.06 )    $ 0.25  
Diluted(7)   $ 0.11     $ 0.08     $ 0.48     $ (0.06 )    $ 0.25  
Weighted average number of outstanding shares (in thousands)
 
Basic     28,995       27,679       27,891       27,288       27,019  
Diluted     29,957       29,761       28,884       27,288       27,019  
Other data:
                                            
Adjusted gross profit(8)   $ 17,625     $ 12,989     $ 62,126     $ 54,845     $ 38,014  
Adjusted gross profit margin percentage(8)     40.9 %      37.8 %      39.2 %      42.6 %      42.2 % 
Adjusted selling, general and administrative expenses(8)   $ (11,999 )    $ (10,570 )    $ (50,297 )    $ (37,809 )    $ (25,584 ) 
Adjusted profit from operations(9)     3,833       790       4,673       12,266       9,931  
Adjusted profit from operations margin percentage(9)     8.9 %      2.3 %      3.0 %      9.5 %      11.0 % 
Adjusted profit for the period/year(10)   $ 3,432     $ 2,471     $ 14,562     $ 10,408     $ 7,088  
Adjusted profit margin percentage for the period/year(10)     8.0 %      7.2 %      9.2 %      8.1 %      7.9 % 

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(1) Includes depreciation and amortization expense of $855, $681, $3,215, $1,964 and $1,545 for the three months ended March 31, 2014 and 2013 and for the years ended December 31, 2013, 2012 and 2011, respectively. Also includes transactions with related parties for an amount of $2,901 and $1,169 for the years ended December 31, 2012 and 2011, respectively. There were no related party transactions for the three months ended March 31, 2014 and 2013 and for the year ended December 31, 2013. Finally, includes share-based compensation expense of $4, $33, $190 and $4,644 for the three months ended March 31, 2014 and 2013 and for the years ended December 31, 2013 and 2012, respectively. There was no share-based compensation expense for the year ended December 31, 2011.
(2) Includes depreciation and amortization expense of $938, $948, $3,941, $2,806 and $954 for the three months ended March 31, 2014 and 2013 and for the years ended December 31, 2013, 2012 and 2011, respectively. Also includes transactions with related parties for an amount of $1,381 and $931 for the years ended December 31, 2012 and 2011, respectively. There were no related party transactions for the three months ended March 31, 2014 and 2013 and for the year ended December 31, 2013. Finally, includes share-based compensation expense of $4, $49, $603 and $7,065 for the three months ended March 31, 2014 and 2013 and for the years ended December 31, 2013 and 2012, respectively. There was no share-based compensation expense for the year ended December 31, 2011.
(3) Includes gain on transactions with bonds of $2,606 from proceeds received by our Argentine subsidiaries through capitalizations for the three months ended March 31, 2014 and gain on transactions with bonds of $3,107 and $29,577 from proceeds received by our Argentine subsidiaries as payments from exports for the three months ended March 31, 2013 and the year ended December 31, 2013, respectively.
(4) Includes net foreign exchange loss of $1,169 and $334 for the three months ended March 31, 2014 and 2013, respectively, and $4,238, $1,098 and $548 for the years ended December 31, 2013, 2012 and 2011, respectively.
(5) Includes a $1,703 gain on remeasurement of the contingent consideration related to the acquisition of TerraForum for the year ended December 31, 2013.
(6) Includes deferred tax of $529, $2,479 and $109 for the years ended December 31, 2013, 2012 and 2011, respectively.
(7) Includes the retroactive effect on our common shares of our reorganization as a Luxembourg company and our 1-to-12 reverse share split for each of the years and periods presented. See notes 1.1 and 31.4 to our audited consolidated financial statements for more information about the reorganization and the reverse share split, respectively.
(8) To supplement our gross profit presented in accordance with IFRS, we use the non-IFRS financial measure of adjusted gross profit, which is adjusted from gross profit, the most comparable IFRS measure, to exclude depreciation and amortization expense and share-based compensation expense included in cost of revenues. For a reconciliation of gross profit to adjusted gross profit, see footnote 9. We also present the non-IFRS financial measure of adjusted gross profit margin percentage, which reflects adjusted gross profit margin as a percentage of revenues. To supplement our selling, general and administrative expenses presented in accordance with IFRS, we use the non-IFRS financial measure of adjusted selling, general and administrative expenses, which is adjusted from selling, general and administrative expenses, the most comparable IFRS measure, to exclude depreciation and amortization expense and share-based compensation expense included in selling, general and administrative expenses. For a reconciliation of selling, general and administrative expenses to adjusted selling, general and administrative expenses, see footnote 8. We believe that excluding such depreciation and amortization and share-based compensation expense amounts from gross profit and selling, general and administrative expenses and depreciation and amortization expense and share-based compensation expense included in cost of revenues as a percentage of revenues from gross profit margin helps investors compare us and similar companies that exclude depreciation and amortization expense and share-based compensation expense from gross profit and selling, general and administrative expenses and depreciation and amortization expense and share-based compensation expense included in cost of revenues as a percentage of revenues from gross profit margin. These non-IFRS financial measures are provided as additional information to enhance investors’ overall understanding of the historical and current financial performance of our operations. These non-IFRS financial measures should be considered in addition to results prepared in accordance with IFRS, but should not be considered as substitutes for or superior to IFRS results. In addition, our calculation of these non-IFRS financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

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(9) To supplement our profit (loss) from operations presented in accordance with IFRS, we use the non-IFRS financial measure of adjusted profit from operations, which is adjusted from profit from operations the most comparable IFRS measure, to exclude share-based compensation expense and impairment of tax credits. For a reconciliation of profit from operations to adjusted profit from operations, see footnote 9. In addition, we present the non-IFRS financial measure of adjusted profit from operations margin percentage, which reflects adjusted profit from operations as a percentage of revenues. These non-IFRS financial measures are provided as additional information to enhance investors’ overall understanding of the historical and current financial performance of our operations. These non-IFRS financial measures should be considered in addition to results prepared in accordance with IFRS, but should not be considered as substitutes for or superior to IFRS results. In addition, our calculation of these non-IFRS financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.
(10) To supplement our profit (loss) presented in accordance with IFRS, we use the non-IFRS financial measure of adjusted profit for the period/year, which is adjusted from profit (loss) for the period/year, the most comparable IFRS measure, to exclude share-based compensation expense. In addition, we present the non-IFRS financial measure of adjusted profit margin percentage for the period/year, which reflects adjusted profit for the period/year as a percentage of revenues. These non-IFRS financial measures are provided as additional information to enhance investor’s overall understanding of the historical and current financial performance of our operations. These non-IFRS financial measures should be considered in addition to results prepared in accordance with IFRS, but should not be considered as substitutes for or superior to IFRS results. In addition, our calculation of these non-IFRS financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

         
  Three months ended
March 31,
  Year ended
December 31,
     2014   2013   2013   2012   2011
     (in thousands, except for percentages)   (in thousands, except
for percentages)
Reconciliation of adjusted gross profit
                                            
Gross profit   $ 16,766     $ 12,275     $ 58,721     $ 48,237     $ 36,469  
Adjustments
                                            
Depreciation and amortization expense     855       681       3,215       1,964       1,545  
Share-based compensation expense     4       33       190       4,644        
Adjusted gross profit   $ 17,625     $ 12,989     $ 62,126     $ 54,845     $ 38,014  
Reconciliation of adjusted selling, general and administrative expenses
                                            
Selling, general and administrative expenses   $ (12,941 )    $ (11,567 )    $ (54,841 )    $ (47,680 )    $ (26,538 ) 
Adjustments
                                            
Depreciation and amortization expense     938       948       3,941       2,806       954  
Share-based compensation expense     4       49       603       7,065        
Adjusted selling, general and administrative expenses   $ (11,999 )    $ (10,570 )    $ (50,297 )    $ (37,809 )    $ (25,584 ) 
Reconciliation of adjusted profit from operations
                                            
Profit (Loss) from operations   $ 3,409     $ 708     $ (5,699 )    $ 557     $ 9,931  
Adjustments
                                            
Impairment of tax credits     416             9,579              
Share-based compensation expense     8       82       793       11,709        
Adjusted profit from operations   $ 3,833     $ 790     $ 4,673     $ 12,266     $ 9,931  
Reconciliation of adjusted profit for the period/year
                                            
Profit (loss) for the period/year   $ 3,424     $ 2,389     $ 13,769     $ (1,301 )    $ 7,088  
Adjustments
                                            
Share-based compensation expense     8       82       793       11,709        
Adjusted profit for the period/year   $ 3,432     $ 2,471     $ 14,562     $ 10,408     $ 7,088  

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  As of March 31,   As of December 31,
     2014   2013   2012   2011
     (in thousands)   (in thousands)
Consolidated statements of financial position data:
                                   
Cash and cash equivalents   $ 13,191     $ 17,051     $ 7,685     $ 7,013  
Restricted cash equivalent     361                    
Investments     11,493       9,634       914       2,234  
Trade receivables     34,390       34,418       27,847       19,865  
Other receivables (current and non-current)     12,863       12,333       17,997       13,735  
Deferred tax assets     3,406       3,117       2,588       109  
Investment in associates     450                    
Other financial assets     984       1,284              
Property and equipment     15,952       14,723       10,865       8,540  
Intangible assets     5,786       6,141       4,305       1,488  
Goodwill     13,128       13,046       9,181       6,389  
Total assets   $ 112,004     $ 111,747     $ 81,382     $ 59,373  
Trade payables   $ 4,499     $ 8,016     $ 3,994     $ 2,848  
Payroll and social security taxes payable     17,994       17,823       13,703       9,872  
Borrowings (current and non-current)     11,188       11,795       11,782       8,936  
Other financial liabilities (current and non-current)     8,390       8,763       6,537       4,046  
Tax liabilities     5,885       5,190       1,440       584  
Other liabilities (current and non-current)     322       24       700       69  
Provisions for contingencies     275       271       288       269  
Total liabilities   $ 48,553     $ 51,882     $ 38,444     $ 26,624  
Total equity   $ 63,451     $ 59,865     $ 42,938     $ 32,749  
Total equity and liabilities   $ 112,004     $ 111,747     $ 81,382     $ 59,373  

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RECENT DEVELOPMENTS

Set forth below is a description of the majority interest purchase agreement and the minority interest purchase agreement relating to our purchase of Huddle Investment, and certain related documents. For additional information, see note 23 to our audited consolidated financial statements

Huddle Acquisition

Majority Interest Purchase Agreement

On October 18, 2013, we purchased from Pusfel S.A. (“Pusfel”) and ACX Partners One LP (“ACX”), two of the three equityholders in Huddle Investment, an 86.25% equity interest in Huddle Investment, pursuant to a stock purchase agreement dated October 11, 2013 (the “majority interest purchase agreement”).

The majority interest purchase agreement provides for a cash purchase price of up to $8.0 million payable to the sellers in seven installments, subject to certain adjustments described below, and an additional amount of $0.4 million in consideration of excess cash. At the closing on October 18, 2013, we paid the portion of the first installment of the purchase price ($1.9 million) and the portion of the excess cash in the Huddle Group at the date of the majority interest purchase agreement ($0.3 million) corresponding to ACX. The portion of the first installment and the excess cash corresponding to Pusfel ($1.1 million and $0.2 million, respectively) was paid on November 4, 2013. The second installment of the purchase price ($2.2 million) was paid on April 21, 2014, and the third installment ($1.0 million) was paid on April 22, 2014. The remaining installments (totaling $1.8 million) are payable no later than October 18, 2014, March 31, 2015, March 31, 2016 and October 18, 2018.

Under the majority interest purchase agreement, we are entitled to deduct from the purchase price payments variations in the Huddle Group’s cash balance account, accounts payable and accounts receivable in excess of $0.02 million as of October 17, 2013 (the “cut-off date”) resulting from our post-closing audit of those accounts. In addition, the sellers have agreed to compensate us for any reduction in the Huddle Group’s accounts receivable on the cut-off date.

The sellers have agreed not to compete with us in any country through October 18, 2015 in the design and deployment of customized software solutions for Internet, intranet and social media using development technologies. In addition, the sellers have agreed to a non-solicitation period expiring on October 18, 2016. We agreed to make our best commercial efforts to replace and release, within 120 days after October 18, 2013, the individual shareholders in Pusfel from their obligations under their personal guarantees of two office leases and a 288,000 Argentine peso bank loan under which the Huddle Group is obligated. As of May 26, 2014, the obligations of the individual shareholders of Pusfel remain in place. We are continuing to make our best commercial efforts to replace and release these obligations.

Minority Interest Purchase Agreement

On October 11, 2013, we also entered into a stock purchase agreement with Gabriel Spitz (the “minority interest purchase agreement”), the president and chief executive officer of Huddle Group Corp. (“Huddle US”), a subsidiary of Huddle Investment, to purchase the remaining 13.75% equity interest in Huddle Investment. The minority interest purchase agreement provides for payment of consideration by us of up to $1.3 million in three installments in the form of newly issued Globant common shares. Mr. Spitz has agreed to deliver his 13.75% equity interest in Huddle Investment to us, and we have agreed to issue our common shares to Mr. Spitz, in three consecutive tranches, subject to the achievement by the Huddle Group of specified gross revenue and gross profit margin targets during the three-month period ending December 31, 2013, and specified gross revenue and EBITDA targets during the 12 months ending December 31, 2014 and the 12 months ending December 31, 2015, respectively. For purposes of the calculations to be made under the minority interest purchase agreement, the common shares to be issued by us are to be valued at price per share equal to $450 million divided by the number of outstanding common shares as of the date of the minority interest purchase agreement.

We are not obligated to issue any common shares to Mr. Spitz, and he is not obligated to transfer any of his interest in Huddle Investment to us, if, on the date of such issuance or transfer, he has resigned from his

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position as officer, director or employee of Huddle Investment, one of its subsidiaries or one of our subsidiaries, or if Huddle Investment or one of its subsidiaries has dismissed him for cause as defined in the minority interest purchase agreement.

If we sell or transfer a direct controlling stake in any of the Huddle Group entities or sell, convey or transfer a material portion of the Huddle Group’s assets to a third party before January 1, 2015, Mr. Spitz will be deemed to have achieved 100% of the gross revenue and EBITDA targets provided in the minority interest purchase agreement. If we carry out any corporate reorganization as a result of which any of the Huddle Group entities ceases to exist and take any action that could reasonably be expected to materially adversely affect the gross revenue and EBITDA of the Huddle Group in a manner that alters the amount of Mr. Spitz’s interest in Huddle Investment to be exchanged for newly issued Globant common shares, Mr. Spitz will be deemed to have achieved 100% of the gross revenue and EBITDA targets provided in the minority interest purchase agreement.

Other Arrangements with Gabriel Spitz

Concurrently with our execution of the minority interest purchase agreement with Mr. Spitz, he entered into the following agreements with us and/or the Huddle Group:

Employment Agreement:  Huddle US has agreed to employ Mr. Spitz as chief executive officer through December 31, 2015, which position includes supervisory and managing responsibility over all the subsidiaries of the Huddle Group. During the term of his employment, Mr. Spitz is entitled to an annual base compensation for 2014 and 2015 of $0.3 million, plus a bonus of up to $0.1 million for each of those two years based on the achievement of specified annual gross revenue and EBITDA targets. The employment agreement includes a covenant by Mr. Spitz not to compete with Huddle US in the United States or Argentina, during the term of his employment, in the design and deployment of customized software solutions for Internet, intranet and social media using development technologies and the SharePoint, WordPress, .Net, PhP, Android and iOS platforms.

Noncompetition Agreement:  Mr. Spitz has entered into a noncompetition agreement with Huddle US under which he has agreed that for a period the later of 12 months from the date of termination of his employment for any reason by that entity and April 18, 2015 (provided that such period shall not expire later than April 18, 2016), he will not compete with Huddle US in the same kinds of services it provides, including but not limited to software development outsourcing services from and to any country or any additional services that Huddle US may be providing at the date of termination. In consideration of Mr. Spitz’s agreement not to compete, Huddle US has agreed to pay Mr. Spitz compensation equal to two and a half times the highest base monthly salary paid to Mr. Spitz between October 18, 2013 and the end of his employment with Huddle US.

Nonsolicitation Agreement:  Mr. Spitz has agreed that for a period the later of 12 months from the date of termination of his employment for any reason and April 18, 2016 (provided that such period shall not expire later than April 18, 2017), he will not solicit any employee or consultant of Huddle US or any other of our subsidiaries to discontinue his or her employment or consulting relationship with such subsidiary or solicit the business of any client of such subsidiary. In consideration of Mr. Spitz’s nonsolicitation agreement, Huddle US has agreed to pay Mr. Spitz compensation equal to two and a half times the highest base monthly salary paid to Mr. Spitz between October 18, 2013 and the end of his employment with Huddle US.

Shareholders Agreement:  Mr. Spitz has entered into a shareholders agreement with us for a term continuing until either we or Mr. Spitz becomes Huddle Investment’s sole equityholder or neither we nor Mr. Spitz hold any shares of Huddle Investment, which provides as follows:

Transfer of equity interests — If either party wishes to transfer his or its equity interest in Huddle Investment to a non-affiliate, the other party shall have a right of first refusal to purchase that equity interest and a “tag-along” sale right. Mr. Spitz may not offer to transfer his equity interest to a third party competing directly or indirectly with Huddle US or us. We also have the right to require Mr. Spitz to sell his equity interest in Huddle Investment upon any sale by us of all of our equity

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interest in Huddle Investment, at the same price and on the same terms as those on which we sell, as long as the purchase price is not less than six times Huddle Investment’s annual EBITDA as calculated based on its most recent annual audited financial statements.
Board composition — As long as Mr. Spitz owns no less than 6.875% of Huddle Investment, he is entitled to appoint himself as one of the directors on its board.
Minority voting rights — As long as Mr. Spitz owns no less than 6.875% of Huddle Investment, approval of the following matters with respect to Huddle Investment require the consent of Mr. Spitz: creation of any class of senior equity; dilutive capital increases; any merger or consolidation; dissolution or liquidation (including dissolution or liquidation of Huddle Investment’s Argentine subsidiary); contracts with affiliates; reduction of equity; issuance of options; and approval of the annual business plan.

Effective April 1, 2016 or in the event of Mr. Spitz’s termination for any reason, we have the right to purchase up to 100% of Mr. Spitz’s equity interest in Huddle Investment for a purchase price equal to six times annual EBITDA as calculated based on its most recent annual audited financial statements.

Effective April 1, 2016 or in the event of Mr. Spitz’s death or permanent disability, he (or his estate) has the right to require us to purchase up to 100% of Mr. Spitz’s equity interest in Huddle Investment for a purchase price equal to six times annual EBITDA as calculated based on its most recent annual audited financial statements.

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RISK FACTORS

You should carefully consider the risks and uncertainties described below, together with the other information contained in this prospectus, 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 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.

Risks Related to Our Business and Industry

If we are unable to maintain 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 delivery centers;
our ability to manage the attrition of our IT professionals; and
our need to devote time and resources to training, professional development and other activities that cannot be billed to our 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.

Increases in our current levels of attrition may increase our operating costs and adversely affect our future business prospects.

The total attrition rate among our Globers was 20.0% for the 12 months ended March 31, 2014, 22.2% for the year ended December 31, 2013, 20.9% for 2012 and 20.7% for 2011. If our attrition rate were to increase, 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 needed 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.

If the pricing structures that 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 operation.

We perform our services primarily under time-and-materials contracts (where materials costs consist of travel and out-of-pocket expenses). We charge out the services performed by our Globers under these contracts at hourly rates that are agreed to at the time the contract is entered into. The hourly rates and other pricing terms negotiated with our clients 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. Our predictions are based on limited data and could turn out to be inaccurate. Typically, we do not have the ability to increase the hourly rates established at the outset of a client project in order to pass through to our client increases in salary costs driven by wage inflation and other marketplace factors. Because we conduct the majority of our operations through our operating subsidiaries located in Argentina, we are subject to the effects of wage inflation and

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other marketplace factors in Argentina, which have increased significantly in recent years. If increases in salary and other operating costs at our Argentine subsidiaries exceed our internal forecasts, the hourly rates established under our time-and-materials contracts might not be sufficient to recover those increased operating costs, which would make those contracts unprofitable for us, thereby adversely affecting our results of operations, financial condition and cash flows from operations.

In addition to our time-and-materials contracts, we undertake some engagements on a fixed-price basis. Revenues from our fixed-price contracts represented approximately 9.3% of our total revenues for the three months ended March 31, 2014, and approximately 15.2%, 14.7% and 12.1% of total revenues for the years ended December 31, 2013, 2012 and 2011, respectively. Our pricing in a fixed-price contract is highly dependent on our assumptions and forecasts about the costs we will incur to complete the related project, which are based on limited data and could turn out to be inaccurate. Any failure by us accurately to estimate the resources and time required to complete a fixed-price contract on time and on budget or any unexpected increase in the cost of our Globers assigned to the related project, office space or materials could expose us to risks associated with cost overruns and could have a material adverse effect on our business, results of operations and financial condition. In addition, any unexpected changes in economic conditions that affect any of the foregoing assumptions and predicitions could render contracts that would have been favorable to us when signed unfavorable.

If we cannot maintain our culture as we grow, we could lose the innovation, creativity and teamwork fostered by our culture, and our solutions, results of operations and business may be harmed.

We believe that a critical contributor to our success has been our culture, which is the foundation that supports and facilitates our distinctive approach. As our company grows, and we are required to add more Globers and infrastructure to support our growth, we may find it increasingly difficult to maintain our culture. If we fail to maintain a culture that fosters innovation, creativity and teamwork, our solutions, results of operations and business may be materially adversely affected. In addition, this offering may create disparities in wealth among our Globers, which may adversely impact relations among Globers and our culture in general.

We may not be able to achieve anticipated growth, which could materially adversely affect our revenues, results of operations, business and prospects.

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 may not be able to achieve our anticipated growth, 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, the longer-term transition in our delivery mix from Buenos Aires-based staffing to increasingly decentralized staffing in other locations in Latin America (and, recently, the United States) has also 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. 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 IT professionals and our business, results of operations and financial condition.

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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 operation may be adversely affected.

Our future success heavily depends upon the continued services of our senior management team and other key employees. We currently do not maintain key man life insurance for any of our founders, members of our senior management team or 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, and 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.

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 non-disclosure 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.

If we are unable to attract and retain highly-skilled IT professionals, we may not be able to maintain client relationships and grow effectively, which may adversely affect our business, results of operations and financial condition.

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 in Latin America, the United States, Europe and elsewhere who possess the technical skills and experience necessary to deliver our services, and that such competition is likely to continue for the foreseeable future. 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, to maintain and renew existing engagements and to win new business depends, in large part, on our ability to hire and retain qualified IT professionals.

We cannot assure you that we will be able to recruit and train a sufficient number of qualified professionals or that we will be successful in retaining current or future employees. Increased hiring by technology companies, particularly in Latin America, the United States and Europe, 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 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.

Our success depends on delivering innovative software solutions that leverage emerging technologies and emerging market trends to drive increased revenues and effective communication with customers. 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 solutions 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

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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.

If the current effective income tax rate payable by us in any country in which we operate is increased or if we lose any country-specific tax benefits, then our financial condition and results of operations may be adversely affected.

We conduct business globally and file income tax returns in multiple jurisdictions. Our consolidated effective income tax rate 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; changing tax laws, regulations and interpretations of such tax laws in multiple jurisdictions; 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.

Under the Software Promotion Law, our operating subsidiaries in Argentina benefit from a 60% reduction in their corporate income tax rate (as applied to income from promoted software activities) and a tax credit of up to 70% of amounts paid for certain social security taxes (contributions) that may be offset against value-added tax liabilities. Law No. 26,692, the 2011 amendment to the Software Promotion Law (“Law No. 26,692”), also allows such tax credits to be applied to reduce our Argentine subsidiaries’ corporate income tax liability by a percentage not higher than the subsidiaries’ declared percentage of exports and extends the tax benefits under the Software Promotion Law until December 31, 2019. On September 16, 2013, the Argentine government published Regulatory Decree No. 1315/2013, which governs the implementation of the Software Promotion Law.

Regulatory Decree No. 1315/2013 introduced specific requirements to qualify for the tax benefits contemplated by the Software Promotion Law. In particular, Regulatory Decree No. 1315/2013 provides that from September 17, 2014 through December 31, 2019, only those companies that are accepted for registration in the National Registry of Software Producers (Registro Nacional de Productores de Software y Servicios Informaticos) maintained by the Secretary of Industry (Secretaria de Industria del Ministerio de Industria) will be entitled to participate in the benefits of the Software Promotion Law. In addition, Regulatory Decree No. 1315/2013 states that the 60% reduction in corporate income tax provided under the Software Promotion Law shall only become effective as of the beginning of the fiscal year after the date on which an applicant is accepted for registration in the National Registry of Software Producers. Accordingly, assuming that our Argentine operating subsidiaries become registered in the National Registry of Software Producers by December 31, 2014, those subsidiaries will not be entitled to the 60% reduction in corporate income tax during the period from September 17, 2014 through December 31, 2014. Furthermore, it is unclear under current Argentine tax rules whether they would be permitted to apply, to the period from January 1, 2014 through September 16, 2014, the lower corporate income tax rate to which they are entitled under the Software Promotion Law as originally enacted in 2004. On June 25, 2014, Huddle Group S.A., IAFH Global S.A. and Sistemas Globales S.A. applied for registration in the National Registry of Software Producers.

On March 11, 2014, the Argentine Federal Administration of Public Revenue (Administración Federal de Ingresos Publicos, or “AFIP”) issued General Resolution No. 3,597 (“General Resolution No. 3,597”). This measure provides that, as a further prerequisite to participation in the benefits of the Software Promotion Law, exporters of software and related services must register in a newly established Special Registry of Exporters of Services (Registro Especial de Exportadores de Servicios). In addition, General Resolution No. 3,597 states

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that any tax credits generated under the Software Promotion Law by a participant in the Software Promotion Law will only be valid until September 17, 2014. Based on our interpretation of Regulatory Decree No. 1315/2013, as supplemented by General Resolution No. 3,597, we believe that any tax credit generated by our Argentine subsidiaries under the Software Promotion Law that has not previously been utilized to cancel their federal taxes will expire upon the earlier of the effective date of their registration in the National Registry of Software Producers and September 17, 2014.

We cannot assure you that all three of our Argentine operating subsidiaries will be accepted for registration in the National Registry of Software Producers and the Special Registry of Exporters of Services before December 31, 2014. If any of our Argentine operating subsidiaries is not accepted for registration in the National Registry of Software Producers and the Special Registry of Exporters of Services in 2014, that subsidiary will only become entitled to the 60% reduction in corporate income tax beginning on January 1 of the year after the year in which it is registered.

Our subsidiary in Uruguay, which is situated in a tax-free zone, benefits from a 0% income tax rate and an exemption from value-added tax.

If these tax incentives in Argentina and Uruguay are changed, terminated, not extended or made available, or our Argentine operating subsidiaries are not accepted for registration in the National Registry of Software Producers and the Special Registry of Exporters of Servicers by the relevant Argentine government authorities, 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 operations. See “Operating and Financial Review and Prospects — Certain Income Statement Line Items — Operating Expenses — Income Tax Expense” and “Operating and Financial Review and Prospects — Liquidity and Capital Resources — Future Capital Requirements.”

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 three months ended March 31, 2014, our largest customer based on revenues, Walt Disney Parks and Resorts Online, accounted for 7.1% of our revenues. During the year ended December 31, 2013, our largest client based on revenues, Walt Disney Parks and Resorts Online, accounted for 6.4% of our revenues. During the same period, our ten largest clients accounted for 39.7% of our revenues. During the year ended December 31, 2012, our largest client based on revenues, Walt Disney Parks and Resorts Online, accounted for 9.3% of our revenues. During the same period, our ten largest clients based on revenues accounted for 45.0% of our revenues. During the year ended December 31, 2011, our largest client based on revenues, Electronic Arts, accounted for 12.7% of our revenues. During the same period, our ten largest clients based on revenues accounted for 54.7% of our revenues.

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.

In addition, a number of factors, including the following, other than our performance could cause the loss of or reduction in business or revenues from a client and these factors are not predictable:

the business or financial condition of that client or the economy generally;
a change in strategic priorities by that client, resulting in a reduced level of spending on technology services;
a demand for price reductions by that client; and

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a decision by that client to move work in-house or to one or several of our competitors.

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.

Our revenues, margins, results of operations and financial condition may be materially adversely affected if general economic conditions in the United States, Europe or the global economy worsen.

We derive a significant portion of our revenues from clients located in the United States and, to a lesser extent, Europe. The 2008-2009 crisis in the financial and credit markets in United States, Europe and Asia led to a global economic slowdown, with the economies of those regions, particularly the Eurozone, continuing to show significant signs of weakness. The technology services industry is particularly sensitive to the economic environment, and tends to decline during general economic downturns. If the U.S. or European economies further weaken or slow, 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.

The ongoing financial crisis in Europe (including concerns that certain European countries may default in payments due on their national debt) and the resulting economic uncertainty could adversely impact our operating results unless and until economic conditions in Europe improve and the prospect of national debt defaults in Europe decline. To the extent that these adverse economic conditions continue or worsen, they will likely have a negative effect on our business.

If we are unable to successfully anticipate changing economic and political conditions affecting the markets in which we operate, we may be unable to effectively plan for or respond to those changes, and our results of operations could be adversely affected.

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, there are relatively few barriers to entry into our markets and we have faced, and 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 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.

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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, could make potential or existing clients reluctant to select us for new engagements, resulting in a loss of business, and could 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.

We are seeking to expand our presence in the United States, which entails significant expenses and deployment of employees on-site with our clients. If we are unable to manage our operational expansion into the United States, it may adversely affect our business, results of operations and prospects.

A key element of Globant’s strategy is to expand our delivery footprint, including by increasing the number of employees that are deployed onsite at our clients or near client locations. In particular, we intend to focus our recruitment efforts on the United States. Client demands, the availability of high-quality technical and operational personnel at attractive 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 our target markets in the United States. If we are unable to manage our expansion efforts effectively, if our expansion plans take longer to implement than expected or if our costs for these efforts exceed our expectations, our business, results of operations and prospects could be materially adversely affected.

If a significant number of our Globers were to join unions, our labor costs and our business could be negatively affected.

As of March 31, 2014, we had 75 Globers, 65 of whom work at our delivery center located in Rosario, Argentina, who are covered by a collective bargaining agreement with the Federación Argentina de Empleados de Comercio y Servicios (“FAECYS”), which is renewed on an annual basis. In addition, our primary Argentine subsidiary is defending a lawsuit filed by FAECYS in which FAECYS is demanding the application of its collective labor agreement to unspecified categories of employees of that subsidiary. According to FAECYS’s claim, our principal Argentine subsidiary would have been required to withhold and transfer to FAECYS an amount equal to 0.5% of the gross monthly salaries of that subsidiary’s payroll from October 2006 to October 2011. Several Argentine technology companies are facing similar lawsuits filed by FAECYS which have been decided in favor of both the companies and FAECYS. Under Argentine law, judicial decisions only apply to the particular case at hand. There is no stare decisis and courts’ decisions are not binding on lower courts even in the same jurisdiction although they may be used as guidelines on other similar cases. See “Business — Legal Proceedings” and the notes to our consolidated financial statements. If a significant additional number of our Globers were to join unions, our labor costs and our business could be negatively affected.

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.

A substantial portion of our clients are concentrated in the following industries: professional services; media and entertainment; technology and telecommunications; and banks, financial services and insurance, which industries, in the aggregate, constituted approximately 78.8% of our total revenues for the three months ended March 31, 2014, and approximately 78.5%, 82.7% and 82.9% of our total revenues for the years ended

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December 31, 2013, 2012 and 2011, respectively. 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, 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 that 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 in these industries, 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 have a relatively short operating history and 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.

Our company was founded in 2003 and, therefore, has a relatively short operating history. In addition, the technology services industry itself 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 any 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. 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.

We are investing substantial cash in new facilities and physical infrastructure, and our profitability and cash flows could be reduced if our business does not grow proportionately.

We have made and continue to make significant contractual commitments related to capital expenditures on construction or expansion of our delivery centers. We may encounter cost overruns or project delays in connection with opening new facilities. These expansions will likely increase our fixed costs and if we are unable to grow our business and revenues proportionately, our profitability and cash flows may be negatively affected.

If we cause disruptions in our clients’ businesses or provide inadequate service, 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 fail to consistently meet service requirements of a client, these errors 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.

The services we provide 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

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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, are generally not limited under our contracts. The successful assertion of one or more large claims against us in amounts greater than those covered by our current insurance policies could materially adversely affect our business, financial condition and results of operations. Even if such assertions against us are unsuccessful, we may incur reputational harm and substantial legal fees.

We may face losses or reputational damage if our software solutions turn out to 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 in general.

Our client relationships, revenues, results of operations and financial condition may be adversely affected if we experience disruptions in our Internet infrastructure, telecommunications or IT systems.

Disruptions in telecommunications, system failures, Internet infrastructure or computer virus attacks could damage our reputation and harm our ability to deliver services to our clients, which could result in client dissatisfaction and a loss of business and related reduction of our revenues. 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 or computer virus attacks. 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 system is or becomes vulnerable to security breaches, or if any of our employees misappropriates data, we may face reputational damage, lose clients and revenues, or incur losses.

We often have access to or are required to collect and store confidential client and customer data. Many of our client contracts do not limit our potential liability for breaches of confidentiality. If any person, including any of our Globers or former Globers, penetrates our network security or misappropriates data or code that belongs to us, our clients, or our clients’ customers, we could be subject to significant liability from our clients or from our clients’ customers for breaching contractual confidentiality provisions or privacy laws. Unauthorized disclosure of sensitive or confidential client and customer data, whether through breach of our computer systems, systems failure, loss or theft of confidential information or intellectual property belonging to our clients or our clients’ customers, or otherwise, could damage our reputation, cause us to lose clients and revenues, and result in financial and other potential losses by us.

Our business, results of operations and financial condition may be adversely affected by the various conflicting and/or onerous legal and regulatory requirements imposed on us by the countries where we operate.

Since we provide services to clients throughout the world, we are subject to numerous, and sometimes conflicting, legal requirements on matters as diverse as import/export controls, content requirements, trade restrictions, tariffs, taxation, sanctions, government affairs, anti-bribery, whistle blowing, internal and

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disclosure control obligations, data protection and privacy and labor relations. Our failure to comply with these regulations in the conduct of our business could result in fines, penalties, criminal sanctions against us or our officers, disgorgement of profits, prohibitions on doing business and adverse impact on our reputation. Our failure to comply with these regulations in connection with the performance of our obligations to our clients could also result in liability for monetary damages, fines and/or criminal prosecution, unfavorable publicity, restrictions on our ability to process information 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.

Due to our operating in a number of countries in Latin America, the United States and the United Kingdom, we are also subject to risks relating to compliance with a variety of national and local laws including multiple tax regimes, labor laws, employee health safety and wages and benefits laws. 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 terminations, discrimination, misclassification or other violations of labor law or other alleged 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. Our failure to comply with applicable regulatory requirements could have a material adverse effect on our business, results of operations and financial condition.

We may not be able to prevent unauthorized use of our intellectual property and our intellectual property rights may not be adequate to protect our business, competitive position, results of operations and financial condition.

Our success depends in part on certain methodologies, practices, tools and technical expertise our company utilizes in designing, developing, implementing and maintaining applications and other proprietary intellectual capital. In order to protect our rights in this intellectual capital, we rely upon a combination of nondisclosure and other contractual arrangements as well as trade secret, patent, copyright and trademark laws. We also generally enter into confidentiality agreements with our employees, consultants, clients and potential clients and limit access to and distribution of our proprietary information.

We hold several trademarks and have a pending U.S. patent application and intend to submit additional U.S. federal and foreign patent and 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. There can be no assurance that the laws, rules, regulations and treaties in the countries in which we operate in effect now or in the future or the contractual and other protective measures we take are adequate to protect us from misappropriation or unauthorized use of our intellectual capital or that such laws, rules, regulations and treaties will not change.

We cannot assure you that we will be able to detect unauthorized use of our intellectual property and take appropriate steps to enforce our rights or that any such steps will be successful. We cannot assure you that we have taken all necessary steps to enforce our intellectual property rights in every jurisdiction in which we operate and we cannot assure you that the intellectual property laws of any jurisdiction in which we operate are adequate to protect our interest or that any favorable judgment obtained by us with respect thereto will be enforced in the courts. Misappropriation by third parties of, or other failure to protect, our intellectual property, including the costs of enforcing our intellectual property rights, could have a material adverse effect on our business, competitive position, results of operations and financial condition.

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.

Our success largely depends on our ability to use and develop our technology, tools, code, methodologies and services without infringing the intellectual property rights of third parties, including patents, copyrights, trade secrets and trademarks. We may 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. These claims may require us to initiate or defend protracted and costly litigation on behalf of our clients, regardless of the merits of these claims and are often not subject to liability limits or exclusion of

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consequential, indirect or punitive damages. If any of these claims succeed, we may be forced to pay damages on behalf of our clients, redesign or cease offering our allegedly infringing services or solutions, or obtain licenses for the intellectual property such services or solutions allegedly infringe. If we cannot obtain all necessary licenses on commercially reasonable terms, our clients may stop using our services or solutions.

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, an 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 challenging our exclusive rights over the use and transfer of works those Globers or independent contractors created or requesting additional compensation for such works.

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. The developers of the technology that we have acquired or may acquire may not have appropriately created, maintained or enforced intellectual property rights in such technology. 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 and time-consuming and could divert management’s attention from our business. A successful infringement claim against us, whether with or without merit, could, among others 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. 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.

We may not be able to recognize revenues in the period in which our services are performed and the costs of those services are incurred, which may cause our margins to fluctuate.

We perform our services primarily under time-and-materials contracts (where our materials costs consist of travel and out-of-pocket expenses) and, to a lesser extent, fixed-price contracts. All revenues are recognized pursuant to applicable accounting standards.

We recognize revenues when realized or realizable and earned, which is when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. If there is uncertainty about the project completion or receipt of payment for the services, revenues are deferred until the uncertainty is sufficiently resolved.

We recognize revenues from fixed-price contracts based on the percentage of completion method. In instances where final acceptance of the product, system or solution is specified by the client, revenues are deferred until all acceptance criteria have been met. In the absence of a sufficient basis to measure progress towards completion, revenues are recognized upon receipt of final acceptance from the client.

Uncertainty about the project completion or receipt of payment for our services or our failure to meet all the acceptance criteria, or otherwise meet a client’s expectations, may result in our having to record the cost related to the performance of services in the period that services were rendered, but delay the timing of revenue recognition to a future period in which all acceptance criteria have been met, which may cause our margins to fluctuate.

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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 currently 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 would adversely affect our results of operations and cash flows could be adversely affected. 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 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 Globant’s strategy is to expand our delivery footprint, including by increasing the number of employees that are deployed onsite at our clients or 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 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, could have a material adverse effect on our business, results of operations and financial condition.

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 or oral agreements 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.

If our current insurance coverage is or becomes insufficient to protect against losses incurred, our business, results of operations and financial condition may be adversely affected.

We provide technology services that are integral to our clients’ businesses. If we were to default in the provision of any contractually agreed-upon services, our clients could suffer significant damages and make claims upon us for those damages. Although we believe that we have adequate processes in place to protect against defaults in the provisions of services, errors and omissions may occur. We currently carry $10 million in errors and omissions liability coverage for all of the services we provide. To the extent client damages are deemed recoverable against us in amounts substantially in excess of our insurance coverage, or if our claims for insurance coverage are denied by our insurance carriers for any reason including, but not limited to a client’s failure to provide insurance carrier-required documentation or a client’s failure to follow insurance carrier-required claim settlement procedures, there could be a material adverse effect on our business, results of operations and financial condition.

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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 of additional businesses. We completed two acquisitions in 2008, one in 2011, two in 2012 and one in 2013. Financing of any future acquisition could require the incurrence of indebtedness, the issuance of equity or a combination of both. 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 and amortization of acquired intangible assets. 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.

We have incurred significant share-based compensation expense in 2012, and may in the future continue to incur share-based compensation expense, which could adversely impact our profits or the trading price of our common shares.

From 2006 through June 30, 2012, we granted a total of 1,306,697 share appreciation rights (“SARs”) to a limited number of key employees pursuant to SAR award agreements as a form of long-term incentive compensation. In June 2012, we decided to replace the SARs with share options, under which the beneficiary employee has an option to purchase our common shares that is exercisable upon the earliest of (i) the effective date of the share option agreement, provided that the employee has been continuously employed by us (or any of our subsidiaries), (ii) an event of liquidity, as defined in the share option agreement, or (iii) an initial public offering registered under the Securities Act. The exercise price of the share options was unchanged from the original SAR award agreements and is required to be paid by the employee in cash at the date of exercise. The share option agreements were signed on June 30, 2012 by all employees who had been awarded SARs under the SAR award agreements.

IFRS prescribes how we account for share-based compensation, which could adversely or negatively impact our results of operations or the price of our common shares. IFRS requires us to recognize share-based compensation as compensation expense in our statement of profit or loss and other comprehensive income generally based on the fair value of equity awards on the date of the grant, with compensation expense recognized over the period in which the recipient is required to provide service as an employee in exchange for the equity award. The modification of the SAR award agreements into share option agreements under which the options are immediately exercisable for those employees who have met the service requirement under the share option agreements were recorded in the year ended December 31, 2012 as a modification of terms of the original agreement prospectively as of the date of change. For the year ended December 31, 2012, we recorded $11.7 million of share-based compensation expense related to these share option agreements. For the year ended December 31, 2013, we recorded $0.8 million of share-based compensation expense related to these share option agreements. For the three months ended March 31, 2014, we recorded $0.01 million of share-based compensation expense related to these share option agreements.

We intend to adopt an equity incentive plan on the closing date of this offering. The expenses associated with share-based compensation may reduce the attractiveness of issuing equity awards under our equity incentive plan. However, if we do not grant equity awards, or if we reduce the number of equity awards we grant, we may not be able to attract and retain key personnel. If we grant more equity awards to attract and retain key personnel, the expenses associated with such additional equity awards could materially adversely affect our results of operations and the trading price of our common shares.

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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.

We are a party to an agreement with one client that restricts our ability to perform similar services for its competitors. We may in the future enter into agreements with clients that restrict our ability to accept assignments from, or render similar services to, those clients’ customers, require us to obtain our clients’ prior written consent to provide services to their customers or restrict our ability to compete with our clients, or bid for or accept any assignment for which those clients are bidding or negotiating. 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 Operating in Latin America and Argentina

Our principal operating subsidiary is based in Argentina and we have subsidiaries in Colombia, Uruguay and Brazil. There are significant risks to operating in those countries that should be carefully considered before making an investment decision.

Latin America

Latin America has experienced adverse economic conditions that may impact our business, financial condition and results of operations.

Our business is dependent to a certain extent upon the economic conditions prevalent in Argentina as well as the other Latin American countries in which we operate, such as Colombia, Uruguay and Brazil. Latin American countries have historically experienced uneven periods of economic growth, as well as recession, periods of high inflation and economic instability. Currently, 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 mild recessions. Adverse economic conditions in any of these countries could have a material adverse effect on our business, financial condition and results of operations.

Latin American governments have exercised and continue to exercise significant influence over the economies of the countries where we operate, which could adversely affect our business, financial condition, results of operations and prospects.

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. Governmental actions to control inflation and other policies and regulations have often involved, among others, price controls, currency devaluations, capital controls and tariffs. 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 rates;
interest rates;
tariff and inflation control policies;
price control policies;
liquidity of domestic capital and lending markets;
electricity rationing;
tax policies, royalty and tax increases and retroactive tax claims; and
other political, diplomatic, social and economic developments in or affecting the countries where we operate.

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Inflation, and government measures to curb inflation in Latin America, may adversely affect the economies in the countries where we operate in Latin America, our business and results of operations.

Some of the countries in which we operate in Latin America have experienced, or are currently experiencing, high rates of inflation. Although inflation rates in many of these countries have been relatively low in the recent past, we cannot assure you that this trend will continue. The measures taken by the governments of these countries to control inflation have often included maintaining a tight monetary policy with high interest rates, thereby restricting the availability of credit and retarding economic growth. Inflation, measures to combat inflation and public speculation about possible additional actions have also contributed significantly to economic uncertainty in many of these countries and to heightened volatility in their securities markets. Periods of higher inflation may also slow the growth rate of local economies. 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.

We face the risk of political and economic crises, instability, terrorism, civil strife, expropriation and other risks of doing business in Latin America, which could adversely affect our business, financial condition and results of operations.

We conduct our operations primarily in Latin America. Economic and political developments in Latin America, including future economic changes or crises (such as inflation, currency devaluation or recession), government deadlock, political instability, terrorism, civil strife, changes in laws and regulations, restrictions on the repatriation of dividends or profits, expropriation or nationalization of property, restrictions on currency convertibility, volatility of the foreign exchange market and exchange controls could impact our operations or the market value of our common shares and have a material adverse effect on our business, financial condition and results of operations.

Argentina

Our business, results of operations and financial condition may be adversely affected by fluctuations in currency exchange rates (most notably between the U.S. dollar and the Argentine peso).

We conduct a substantial portion of our operations outside the United States, and our businesses may be impacted by significant fluctuations in foreign currency exchange rates. The exposure associated with generating revenues and incurring expenses in different currencies and the devaluation of local currency revenues impairing the value of investments in U.S. dollars. Our consolidated financial statements and those of most of our subsidiaries are presented in U.S. dollars, whereas some of our subsidiaries’ operations are performed in local currencies. Therefore, the resulting exchange differences arising from the translation to our presentation currency are recognized in the finance gain or expense item or as a separate component of equity depending on the functional currency for each subsidiary. Fluctuations in exchange rates relative to the U.S. dollar could impair the comparability of our results from period to period and could have a material adverse effect on our results of operations and financial condition.

In addition, our results of operations and financial condition are particularly sensitive to changes in the Argentine peso/U.S. dollar exchange rate because the majority of our operations are conducted in Argentina and therefore our costs are incurred, for the most-part, in Argentine pesos, while the substantial portion of our revenues are generated outside of Argentina in U.S. dollars. Consequently, appreciation of the U.S. dollar relative to the Argentine peso, to the extent not offset by inflation in Argentina, could result in favorable variations in our operating margins and, conversely, depreciation of the U.S. dollar relative to the Argentine peso could impact our operating margins negatively.

In 2002, the enactment of Argentine Law No. 25,561 ended more than a decade of uninterrupted Argentine peso/U.S. dollar parity, and the value of the Argentine peso against the U.S. dollar has fluctuated significantly since then. As a result of this economic instability, the Argentine peso has been subject to significant devaluation against the U.S. dollar and Argentina’s foreign debt rating has been downgraded on multiple occasions based upon concerns regarding economic conditions and rising fears of increased inflationary pressures. This uncertainty may also adversely impact Argentina’s ability to attract capital.

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The increasing level of inflation in Argentina has generated pressure for further depreciation of the Argentine peso. The Argentine peso depreciated 2.6% against the U.S. dollar in 2007, 9.5% in 2008, 10.1% in 2009, 4.7% in 2010, 8.0% in 2011, 14.4% in 2012, 32.5% in 2013 and 22.8% for the three months ended March 31, 2014.

The significant restrictions on the purchase of foreign currency have given rise to the development of an implied rate of exchange. See “— Restrictions on transfers of foreign currency and the repatriation of capital from Argentina may impair our ability to receive dividends and distributions from, and the proceeds of any sale of, our assets in Argentina.” The implied rate of exchange may increase or decrease in the future. We cannot predict future fluctuations in the Argentine peso/U.S. dollar exchange rate. As a result, fluctuations in the Argentine peso against the U.S. dollar may have a material impact on the value of an investment in our common shares. Because most of our operations are located in Argentina, large variations in the comparative value of the Argentina peso and the U.S. dollar may adversely affect our business.

Despite the positive effects of the depreciation of the Argentine peso on the competitiveness of certain sectors of the Argentine economy, including our business, it has also had a far-reaching negative impact on the Argentine economy and on the financial condition of many Argentine businesses and individuals. The devaluation of the Argentine peso has had a negative impact on the ability of certain Argentine businesses to honor their foreign currency-denominated debt, and has also led to very high inflation initially and significantly reduced real wages. The devaluation has also negatively impacted businesses whose success is dependent on domestic market demand, and adversely affected the Argentine government’s ability to honor its foreign debt obligations. If the Argentine peso is significantly devalued, the Argentine economy and our business could be adversely affected.

A significant appreciation of the Argentine peso against the U.S. dollar could also adversely affect the Argentine economy as well as our business. Our results of operations are sensitive to changes in the Argentine peso/U.S. dollar exchange rate because the majority of our operations are conducted in Argentina and therefore our costs are incurred, for the most-part, in Argentine pesos. In the short term, a significant appreciation of the Argentine peso against the U.S. dollar would adversely affect exports and the desire of foreign companies to purchase services from Argentina. Our business is dependent to a certain extent on maintaining our labor and other costs competitive with those of companies located in other regions around the world from which technology and IT services may be purchased by clients in the United States and Europe. Although in the three years ended December 31, 2013 we have not used derivative financial instruments to hedge the risk of foreign exchange volatility, we periodically evaluate the need for hedging strategies with our board of directors, including the use of such instruments to mitigate the effect of foreign exchange rate fluctuations. During the three months ended March 31, 2014, our principal Argentine operating subsidiary, Sistemas Globales S.A., entered into foreign exchange forward contracts with Capital Markets S.A. in U.S. dollars at a specified price, with settlement in June and July 2014. We may in the future, as circumstances warrant, decide to enter into similar or other derivative transactions to hedge our exposure to the Argentine peso/U.S. dollar exchange rate. If we do not hedge such exposure or we do not do so effectively, an appreciation of the Argentine peso against the U.S. dollar may raise our costs, which would increase the prices of our services to our customers, which, in turn, could adversely affect our business, financial condition and results of operations.

Government intervention in the Argentine economy, particularly expropriation policies, could adversely affect our results of operations or financial condition.

The Argentine government has assumed substantial control over the Argentine economy and it may increase its level of intervention in certain areas, particularly expropriation policies. For example, on April 16, 2012, the Argentine government sent a bill to the Argentine Congress to expropriate 51% of the Class D Shares of YPF S.A. (“YPF”), the main Argentine oil company. The expropriation law was passed by Congress on May 3, 2012 and provides for the expropriation of 51% of the share capital of YPF, represented by an identical stake of Class D shares owned, directly or indirectly, by Repsol, S.A. and its affiliates. The Argentine government and the Argentine provinces that are members of the Federal Organization of Hydrocarbon Producing Provinces own 51% and 49%, respectively, of the YPF shares subject to seizure. However, during February 2014, the Argentine government agreed to pay Repsol S.A. $5.0 billion in Argentine sovereign bonds to compensate them for the seizure of the YPF shares. This agreement has been ratified by Repsol S.A.’s shareholders and by the Argentine Congress through Law No. 26,932, which was

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passed on April 24, 2014 and Argentine sovereign bonds have been delivered to Repsol S.A. Certain opposition leaders have threatened to challenge the agreement before the Argentine courts.

Expropriations and other interventions by the Argentine government such as the one relating to YPF can have an adverse impact on the level of foreign investment in Argentina, the access of Argentine companies to the international capital markets and Argentina’s commercial and diplomatic relations with other countries.

In the future, the level of intervention in the economy by the Argentine government may continue or even increase, which may adversely affect Argentina’s economy and, in turn, our business, results of operations and financial condition.

The approval of judicial reforms proposed by the Argentine government could adversely affect our operations.

On April 8, 2013, the Argentine government submitted to the Argentine Congress three bills relating to: (a) the creation of three courts of cassation and the amendment of the Civil and Commercial Procedure Code, which was passed by the Argentine Congress on April 24, 2013 (the “Courts of Cassation Law”); (b) amendments to Law No. 24,937, which governs the Council of the Judiciary, which was passed by the Argentine Congress on May 8, 2013 (the “Council of the Judiciary Law”); and (c) a new regulation providing for precautionary measures in proceedings involving the federal government or any of its decentralized entities, which was passed by the Argentine Congress on April 24, 2013 (the “Precautionary Proceedings Law”).

The Courts of Cassation Law creates: (1) a federal court of cassation to review administrative law matters; (2) a federal court of cassation to review labor and social security law matters; and (3) a federal court of cassation to review civil and commercial law matters. These three new federal courts (collectively, the “Cassation Courts”) will have jurisdiction to review appeals of decisions rendered by the Argentine federal Courts of Appeals on administrative law, labor and social security, and civil and commercial matters, respectively, and to decide the constitutionality of those appeals. Appointees to the Cassation Courts must satisfy the same conditions as Supreme Court judicial candidates in order to be named to the Cassation Courts. Abbreviated designation procedures may be implemented to expedite the appointment process. Finally, the Courts of Cassation Law reduces the number of members of the Supreme Court of Argentina from seven to five. As a result of the passing of this law, judicial proceedings before federal and national courts may require more time and cost to pursue because there will be a new level of judicial review before having access to the Argentine federal Supreme Court.

The Council of the Judiciary Law increases the number of members of the Council of the Judiciary from 13 to 19, including three judges, three lawyers’ representatives, six academic representatives, six congressmen (four from the majority party and two from the minority party) and a member of the federal executive branch. Furthermore, the Council of the Judiciary Law changes the methodology for appointing members to the Council. Members of the Council were previously appointed by their peers. According to the Council of the Judiciary Law, members will be appointed concurrently with the general presidential elections by means of the existing open, compulsory and simultaneous primary elections. The Council of the Judiciary is entrusted with broad powers to: (1) organize and run the judicial system, including the training, appointment and removal of judges; (2) approve the draft proposal for the judicial annual budget, establish the system of compensation and provide for the administration of all judicial personnel; (3) sanction judges and retired judges; and (4) amend the regulatory regime applicable to the judiciary system. Consequently, the election of the members of the Council of the Judiciary is expected to be politically influenced, and non-political constituencies for the removal of judges would have less impact.

Under the Precautionary Proceedings Law, judges will need to establish a period of effectiveness of precautionary measures, under penalty of nullity, against the Argentine government and its agencies of no longer than six months in normal proceedings, and three months in abbreviated proceedings and in cases of “amparo.” The term of precautionary measures may be extended for six months if it is in the public interest. Consideration will be given to any dilatory tactics or proactive measures taken by the party that was awarded the precautionary measures. In addition, judges are allowed to grant precautionary measures that would affect or disrupt the purposes, properties or revenues of the Argentine federal government, nor could judges impose personal monetary charges on public officers. Moreover, precautionary measures against the Argentine federal

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government or its decentralized entities will be effective once the requesting party posts an injunction bond for the expenditures or damages that the measure may cause. The injunction bond will not be required when the precautionary measures are granted to the federal government or any of its decentralized entities. Finally, the law does not permit precautionary measures that concur with the purpose of the substantive litigation.

On June 18, 2013, the Supreme Court declared certain sections of the Council of the Judiciary Law unconstitutional, in particular those sections referring to the increase in the number of members of the Council of the Judiciary and the methodology for appointing such members. The Court of Cassation Law and the Precautionary Proceedings Law have also been challenged before the Argentine courts, although final resolution of these challenges by the Supreme Court is still pending.

These laws may have an effect on our operations in Argentina, since it may become more difficult to guarantee our right to a timely and unbiased judicial review of administrative decisions.

Our results of operations may be adversely affected by high and possibly increasing inflation in Argentina.

Since 2007, the inflation index has been extensively discussed in the Argentine economy. The intervention of the Argentine government in the National Institute of Statistics and Census Information (Instituto Nacional de Estadísticas y Censos, or “INDEC”) and the change in the way the inflation index is measured have resulted in disagreements between the Argentine government and private consultants as to the actual annual inflation rate. The Argentine government has imposed fines on private consultants reporting inflation rates higher than the INDEC data and has refused to permit the International Monetary Fund to perform an annual review of the Argentine economy. As a result, private consultants typically share their data with Argentine lawmakers who oppose the current government, who release such data from time to time. This could result in a further decrease in confidence in Argentina’s economy.

According to the INDEC, the consumer price index increased 10.9%, 10.8% and 9.5% in 2013, 2012 and 2011, respectively. The INDEC reported an inflation rate of 10.9% in 2013 and a rate of 9.7% for the three months ended March 31, 2014. Uncertainty surrounding future inflation rates has slowed the rebound in the long-term credit market. Private estimates, on average, refer to annual rates of inflation substantially in excess of those published by the INDEC. For example, opposition lawmakers in Argentina reported an inflation rate of 37.3% annualized for 2014 as of April 30, 2014, and an inflation rate of 28.3% for 2013 and 25.6% for 2012.

In the past, inflation has materially undermined the Argentine economy and the government’s ability to create conditions that would permit stable growth. High inflation may also undermine Argentina’s foreign competitiveness in international markets and adversely affect economic activity and employment, as well as our business and results of operation. In particular, the margin on our services is impacted by the increase in our costs in providing those services, which is influenced by wage inflation in Argentina, as well as other factors.

In June 2008, the INDEC published a new consumer price index, which has been criticized by economists and investors after its initial report found prices rising below expectations. These events have affected the credibility of the consumer price index published by the INDEC, as well as other indices published by the INDEC that use the consumer price index in their calculation, including the poverty index, the unemployment index and real Gross Domestic Product (“GDP”). On November 23, 2010, the Argentine government consulted with the International Monetary Fund (the “IMF”) for technical assistance in order to prepare a new national consumer price index, with the aim of modernizing the current statistical system. During the first quarter of 2011, a team from the IMF started working in conjunction with the INDEC to create this index. Notwithstanding the foregoing, reports published by the IMF state that their staff also uses alternative measures of inflation for macroeconomic surveillance, including data produced by private sources, which have shown inflation rates considerably higher than those issued by the INDEC since 2007, and the IMF has called on Argentina to adopt remedial measures to address the quality of official data. In its meeting held on February 1, 2013, the Executive Board of the IMF found that Argentina’s progress in implementing remedial measures since September 2012 had not been sufficient, and, as a result, the IMF issued a declaration of censure against Argentina in connection with the breach of its related obligations to the IMF under the Articles of Agreement and called on Argentina to adopt remedial measures to address the inaccuracy of inflation and GDP data without further delay. On February 14, 2013, the Argentine government announced a new consumer price index called the Indice de Precios al Consumidor Nacional Urbano (the “IPCNU”),

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which was 3.7% for January 2014, 3.4% for February 2014 and 2.6% for March 2014. The IMF acknowledged the new index and indicated it will review the same to confirm that it satisfies IMF requirements. In addition, in February 2014, the INDEC released a new GDP index for 2013, equal to 3.0%, which differs from the GDP index originally released by the INDEC for the same period of 5.5%. If it is determined that it is necessary to unfavorably adjust the consumer price index and other INDEC indices, there could be a significant decrease in confidence in the Argentine economy, which could, in turn, have a material adverse effect on us.

Argentina’s defaults with respect to the payment of its foreign debt could prevent the government and the private sector from accessing the international capital markets, which could adversely affect our financial condition, including our ability to obtain financing outside of Argentina.

As of December 31, 2001, Argentina’s total public debt amounted to $144.5 billion. In December of 2001, Argentina defaulted on over $81.8 billion in external debt to bondholders. In addition, since 2002, Argentina suspended payments on over $15.7 billion in debt to multilateral financial institutions (such as the IMF and the “Paris Club” — an informal intergovernmental group of creditors from 19 different countries that convenes to renegotiate debts to sovereign creditors) and other financial institutions. In 2006, Argentina cancelled all of its outstanding debt with the IMF totaling approximately $9.5 billion, and through various exchange offers made to bondholders between 2004 and 2010, restructured over $74.4 billion of its defaulted debt. On September 2, 2008, pursuant to Decree No. 1,394/08, Argentina officially announced a decision to pay its outstanding debt to the Paris Club, which offer was accepted. As of September 30, 2013, Argentina’s total public debt (including amounts owed to the Paris Club) amounted to $201 billion and the amount owed specifically to the Paris Club, as of September 30, 2013, equaled $5.9 billion. On May 29, 2014, the Paris Club announced that it had reach an agreement to clear Argentina’s debt in arrears due to the Paris Club in the amount of $9.7 billion, as of April 30, 2014. The agreement provides for repayment of the debt within five years, including a minimum of $1.2 billion to be paid during May 2015 and an additional payment during May 2016.

The foreign shareholders of several Argentine companies, including public utilities and bondholders that did not participate in the exchange offers described above, have filed claims in excess of $16 billion with the International Centre for Settlement of Investment Disputes (the “ICSID”) alleging that the emergency measures adopted by the government differ from the just and equal treatment dispositions set forth in several bilateral investment treaties to which Argentina is a party. As of December 31, 2011, the ICSID has ruled that the Argentine government must pay an amount of approximately $1 billion, plus interest and incurred expenses, in respect of such claims. Furthermore, in connection with the same matter, the United Nations Commission on International Trade Law has issued two judgments requiring the Argentine government to pay $240 million, plus interest and expenses, to these entities. In addition, on August 4, 2011, the ICSID held that it had jurisdiction to hear claims brought by 60,000 Italian holders of Argentine sovereign debt who did not participate in the exchange offers and filed a request for arbitration with the ICSID for a claim totaling $4.4 billion. The tribunal also issued a procedural order to examine how the proceedings were conducted and how the procedural calendar was developed. On July 11, 2013, the arbitration tribunal was constituted in accordance with ICSID convention. From August 9–13, 2013, certain ICSID judgment creditors, including Blue Ridge Investments L.L.C., CC-WB Holdings LLC, Vivendi Universal S.A., Compañía Aguas de Aconquija S.A., Azurix Corp. and NG-UN Holdings LLC, sent letters to the Argentine Ministry of Economy proposing settlement of their claims. On October 18, 2013, the Argentine Ministry of Economy issued Resolution No. 598/2013, which approved a form of a transactional agreement to be entered into with such creditors. The transactional agreement provides for a 25% reduction of the creditors’ claims and payment in kind through Argentine BODEN and Bonos de la Nación Argentina en Dólares Estadounidenses 7% 2017. In addition, the creditors would subscribe for Argentine Bono Argentino de Ahorro para el Desarrollo Económico — Registrable in an amount equal to 10% of their claims. By entering into these transactional agreements, the creditors and the Argentine government will waive all of their respective claims in regard to any awards and any other judicial or administrative actions seeking to obtain recognition and enforcement of such awards. On March 20, 2014, the ICSID proceeding filed by Repsol S.A. on December 18, 2012 in connection with YPF’s expropriation was suspended pursuant to an agreement between Repsol and the Argentine government, which was ratified by the Argentine Congress on April 24, 2014.

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On March 28, 2012, by way of enactment of Law No. 26,739, the Argentine Congress approved an amendment of the charter of the Argentine Central Bank (Banco Central de la República Argentina) that, among other things:

limits the availability of economic information (i.e., expected rate of inflation, amount and composition of reserves and of the monetary base);
significantly increases the Argentine government’s access to financing from the Argentine Central Bank;
grants the board of directors of the Argentine Central Bank the discretion to determine the required level of reserves;
establishes that any reserves above the required level fixed by the board of directors constitute freely available reserves; and
provides that in addition to the payment of obligations with international financial institutions, the freely available reserves may now also be applied towards the payment of official bilateral external debt (such as the Paris Club).

In litigation brought before the U.S. federal district court for the Southern District of New York, certain holders of Argentina’s bonds that did not participate in the exchange offers conducted in 2005 and 2010 have challenged Argentina’s decision to pay bondholders who agreed to participate in those exchange offers even as it refuses to pay the nonparticipating bondholders. Pursuant to an order dated February 23, 2012, as amended by an order dated November 21, 2012, based on the equal treatment provision under the defaulted debt, the district court granted an injunction requiring Argentina to pay holders of the defaulted debt as a precondition to making a single interest payment under the restructured debt. The injunction further required Argentina to pay into an escrow account over $1.3 billion prior to making the December 15 scheduled payment of the restructured debt. In its decision issued on October 26, 2012, the U.S. Court of Appeals for the Second Circuit (the “Second Circuit”) affirmed the U.S. federal district court’s ruling that Argentina’s actions violate contractual provisions in the Fiscal Agency Agreement under which the bonds were issued that require the issuer to treat bondholders equally. The Second Circuit’s decision also largely upheld injunctions in favor of the nonparticipating bondholders that the U.S. federal district court issued in February 2012 but stayed pending appeal. The injunctions bar Argentina from paying $3.41 billion that is due to the bondholders on the restructured debt that was issued to them in the 2005 and 2010 exchange offers unless it also makes arrangements to deposit $1.33 billion into escrow to pay the nonparticipating bondholders on the bonds held by them. In an order issued on November 21, 2012, the U.S. federal district court lifted its stay on those injunctions and, as per the Second Circuit’s prior request, clarified the injunction payment formula. However, on November 28, 2012, the Second Circuit granted a stay on the above injunctions and scheduled oral arguments by the parties for February 27, 2013. Following a hearing on March 29, 2013, Argentina submitted an alternative payment formula that includes two options. Under the first option, individual investors will receive par bonds due in 2013, plus cash payment for past-due interest and GDP-linked securities. Under the second option, institutional investors will receive discount bonds due in 2033, along with bonds due 2017 for past-due interest and GDP-linked securities. On April 19, 2013, the plaintiffs filed a response rejecting the Argentine offer. On June 24, 2013, Argentina filed a petition for a writ of certiorari in the United States Supreme Court asking it to review the October 26, 2012 decision of the Second Circuit. On August 23, 2013, the Second Circuit affirmed the district court ruling of November 21, 2012 with respect to the injunction payment formula, but stayed enforcement of the injunctions pending resolution of Argentina’s petition before the Supreme Court. On September 30, 2013, the Supreme Court decided not to include the review of the October 26, 2012 decision in its docket for the coming term. On February 17, 2014, Argentina filed a petition for a writ of certiorari in the Supreme Court asking it to review the August 23, 2013 decision of the Second Circuit. On April 21, 2014, the Supreme Court held a hearing with the nonparticipating bondholders and Argentina. On June 16, 2014, the Supreme Court decided not to hear Argentina’s appeal on the August 23, 2013 decision of the Second Circuit. Subsequently, the District Court lifted the stay on enforcement of the injunction on June 18, 2014, and on June 26, 2014, it denied an additional request for a stay of the injunctions. Additionally, on June 23, 2014, the District Court appointed Daniel A. Pollack as Special Master to mediate settlement negotiations between Argentina and the litigating bondholders, and as of the date of this prospectus, those negotiations are ongoing. On June 26, 2014, Argentina announced that it had deposited $539 million with the Bank of New York Mellon, the trustee

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which manages bond payments for Argentina’s main, not litigating, bondholders and, on June 27, 2014, the U.S. federal judge in charge of the case issued a statement saying he would nullify any payment made to the main bondholders.

On September 20, 2013, Argentina passed Law No. 26,886 approving the opening of a new exchange offer to those bondholders that did not participate in the 2005 and 2010 exchange offers.

Argentina’s default with respect to the payment of its foreign debt, its delay in completing the debt restructuring process with creditors that did not participate in the related exchange offers, the aforementioned complaints filed against Argentina and the Supreme Court’s decision not to hear Argentina’s appeal, could prevent the government from obtaining international private financing or receiving direct foreign investment as well as private sector companies in Argentina from accessing the international capital markets. Without access to international private financing, Argentina may not be able to finance its obligations, and financing from multilateral financial institutions may be limited or not available. Without access to direct foreign investment, the government may not have sufficient financial resources to foster economic growth.

Our ability to obtain U.S. dollar-denominated financing has been adversely impacted by these factors. During the first half of 2011, we were able to obtain export lines of credit from our Argentine lenders in U.S. dollars at interest rates of 2 – 3% per year. Toward the end of 2011, the interest rates on our export lines from those lenders increased to 5 – 6% per year. During 2012, 2013 and 2014, it became increasingly difficult to obtain financing in U.S. dollars, and loans in local currencies carry significantly higher interest rates. As a result, we expect to incur higher financing costs in future periods, which may have an adverse impact on our results of operations and financial condition.

The lack of financing available for Argentine companies may have an adverse effect on the results of our operations, our ability to access capital and the market price of our common shares.

The prospects for Argentine enterprises accessing financial markets are limited in terms of the amount of financing available and the conditions and costs of such financing. In addition to the default on the Argentine sovereign debt and the global economic crisis that have significantly limited the ability of Argentine enterprises to access international financial markets, in November 2008, the Argentine congress passed a law eliminating the private pension fund system and transferring all retirement and pension funds held by the pension fund administrators (Administradoras de Fondos de Jubilaciones y Pensiones, or “AFJPs”) to the National Social Security Administrative Office (Administración Nacional de la Seguridad Social). Because the AFJPs had been the major institutional investors in the Argentine capital markets, the nationalization of the pension fund system has led to a reduction of the liquidity available in the local Argentine capital markets. In addition, the Argentine government, through its assumption of the AFJP’s equity investments in a variety of the country’s main private companies, became a significant shareholder in such companies. The nationalization of the AFJPs has adversely affected investor confidence in Argentina, which may impact our ability to access the capital markets in the future.

Lack of access to international or domestic financial markets could affect the projected capital expenditures for our operations in Argentina, which, in turn, may have an adverse effect on the results of our operations and on the market price of our common shares.

Argentine exchange controls on the acquisition of foreign currency and on transfers abroad and capital inflows have limited, and may continue to limit, the availability of international credit and access to capital markets, which could have a material adverse effect on our financial condition and business.

In 2001 and 2002, Argentina imposed exchange controls and transfer restrictions substantially limiting the ability of enterprises to retain or obtain foreign currency or make payments abroad. Although some of these restrictions were subsequently eased, in June 2005, the Argentine government issued Decree No. 616/2005, which established new controls on capital inflows that could result in reduced availability of international credit, including the requirement, subject to certain exceptions, that 30% of all funds remitted to Argentina remain deposited in a domestic financial institution for 365 days in a non-interest bearing account. In addition, since the second half of 2011, the Argentine government has increased certain controls on the incurrence of foreign currency-denominated indebtedness, the acquisition of foreign currency and foreign assets by local residents. For example, the Argentine Central Bank adopted regulations that (i) shortened the period for a

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borrower to convert foreign currency-denominated indebtedness into Argentine pesos, (ii) shortened a borrower’s window of access to the local foreign exchange market in connection with a prepayment of scheduled interest payments in respect of foreign currency-denominated indebtedness and (iii) suspended the ability of local residents to access the local exchange market for the acquisition of foreign currency. Furthermore, new AFIP regulations require that all foreign exchange transactions be registered with AFIP. In addition, the Argentine government may impose or increase exchange controls or transfer restrictions in the future in response to capital flight or a significant depreciation of the Argentine peso. Moreover, legislative, judicial or administrative changes or interpretations may be forthcoming. Additional controls could have a negative effect on the ability of Argentine entities to access the international credit or capital markets, the Argentine economy and our financial condition and business.

Restrictions on transfers of foreign currency and the repatriation of capital from Argentina may impair our ability to receive dividends and distributions from, and the proceeds of any sale of, our assets in Argentina.

Argentine law currently permits the Argentine government to impose restrictions on the conversion of Argentine currency into foreign currencies and on the remittance to foreign investors of proceeds from their investments in Argentina (including dividend payments) in circumstances where a serious imbalance develops in Argentina’s balance of payments or where there are reasons to foresee such an imbalance. Beginning in December 2001, the Argentine government implemented a number of monetary and foreign exchange control measures that included restrictions on the free disposition of funds deposited with banks and on the transfer of funds abroad without prior approval by the Argentine Central Bank, some of which are still in effect. Among the restrictions that are still in effect are those relating to the repatriation of certain funds collected in Argentina by non-Argentine residents.

Although the transfer of funds abroad by local companies in order to pay annual dividends only to foreign shareholders, based on approved and fully audited financial statements, does not require formal approval by the Argentine Central Bank, the recent decrease in availability of U.S. dollars in Argentina has led the Argentine government to impose informal restrictions on certain local companies and individuals for purchasing foreign currency. These restrictions on foreign currency purchases started in October 2011 and tightened during 2012 and 2013. Informal restrictions may consist of de facto measures restricting local residents and companies from purchasing foreign currency through the Argentine Single Free Foreign Exchange Market (Mercado Único y Libre de Cambios, or “FX Market”) for the purpose of making payments abroad, such as dividends, capital reductions, and payment for importation of goods and services. For example, local banks may request, even when not expressly required by any regulation, the prior opinion of the Argentine Central Bank before executing any specific foreign exchange transaction. For more information, please see “Regulatory Overview — Foreign Exchange Controls.” In addition, other exchange controls could impair or prevent the conversion of anticipated dividends, distributions, or the proceeds from any sale of equity holdings in Argentina, as the case may be, from Argentine pesos into U.S. dollars and the remittance of the U.S. dollars abroad. These restrictions and controls could interfere with the ability of our Argentine subsidiaries to make distributions in U.S. dollars to us and thus our ability to pay dividends in the future. The domestic revenues of our Argentine subsidiaries (excluding intercompany revenues to other Globant subsidiaries, which are eliminated in consolidation) were $1.0 million for the three months ended March 31, 2014, $5.5 million in 2013, $4.9 million in 2012 and $4.0 million in 2011, representing 2.1% of our quarterly revenues and 14.4%, 3.8% and 4.4% of our annual consolidated revenues, respectively.

Also, if payments cannot be made in U.S. dollars abroad, the repatriation of any funds collected by foreign investors in Argentine pesos in Argentina may be subject to restrictions. As from October 28, 2011, in order for a non-Argentine investor to be granted access to the FX Market to purchase foreign currency with Argentine pesos received in Argentina as a result of a stock sale, capital reduction or liquidation of an Argentine company, it is a requirement that the funds originally used for such investment, disbursement or capital contribution, as applicable, were settled through the FX Market. This requirement applies only to capital contributions to local companies or foreign currency purchases of the stock of an Argentine company made as from October 28, 2011 that qualify as “foreign direct investments” (i.e., represent at least 10% of the Argentine company’s capital stock). In the case of equity positions below the 10% threshold, repatriation is subject to a monthly threshold of $0.5 million. Transfers in excess of that monthly threshold are subject to prior approval by the Argentine Central Bank. The Argentine government could adopt further restrictive

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measures in the future. If that were the case, a foreign shareholder, such as ourselves, may be prevented from converting the Argentine pesos it receives in Argentina into U.S. dollars. If the exchange rate fluctuates significantly during a time when we cannot convert the foreign currency, we may lose some or all of the value of the dividend distribution or sale proceeds.

These restrictions and requirements could adversely affect our financial condition and the results of our operations, or the market price of our common shares.

Argentina’s regulations on proceeds from the export of services increase our exposure to fluctuations in the value of the Argentine peso, which, in turn, could have an adverse effect on our operations and the market price of our common shares. The imposition in the future of additional regulations on proceeds collected outside Argentina for services rendered to non-Argentine residents or of export duties and controls could also have an adverse effect on us.

Argentine law, including Communication “A” 5264 of the Argentine Central Bank, as amended, requires Argentine residents to transfer the foreign currency proceeds received for services rendered to non-Argentine residents into a local account with a domestic financial institution and to convert those proceeds into Argentine pesos through the FX Market, which is administered by the Argentine Central Bank within 15 business days from the date the foreign currency proceeds are collected.

Argentine law does not require exporters of services to be paid only in foreign currency. The applicable regulations do not prohibit or regulate the receipt of in-kind payments by such exporters. During 2013, our U.S. subsidiary has agreed to make payment for a portion of the services provided by our Argentine subsidiaries by delivery of U.S. dollar-denominated BODEN purchased in the U.S. debt markets (in U.S. dollars). The BODEN were then delivered to our Argentine subsidiaries as payment for a portion of the services rendered and, after being held by our Argentine subsidiaries for between, on average, 10 to 30 days, were sold in the Argentine market for Argentine pesos. Because the fair value of the BODEN based on the quoted Argentine peso price in the Argentine markets during the year ended December 31, 2013 was higher than the quoted U.S. dollar price for the BODEN in the U.S. debt markets (in U.S. dollars) converted at the official exchange rate prevailing in Argentina (which is the rate used to convert transactions in foreign currency into our Argentine subsidiaries’ functional currency), we recognized a gain when remeasuring the fair value (expressed in Argentine pesos) of the BODEN into U.S. dollars at the official exchange rate prevailing in Argentina.

We cannot assure you that the quoted price of the BODEN in Argentine pesos in the Argentine markets will continue to be higher than the quoted price in the U.S. debt markets in U.S. dollars converted at the official exchange rate prevailing in Argentina. Although during the three month period ended March 31, 2014, we did not participate in any BODEN transactions in connection with payment by our U.S. subsidiary for services provided by our Argentine subsidiaries, if in the future we decide to resume those transactions, we cannot assure you that the Argentine government will not restrict exporters from receiving in-kind payment, require them to repatriate those payments received through the FX Market, or make any other legislative, judicial, or administrative changes or interpretations, any of which could have a material adverse effect on our business, results of operations and financial condition. See Note 3.12.7 to our audited consolidated financial statements, “Operating and Financial Review and Prospects — Results of Operations — 2013 Compared to 2012” and “Certain Income Statement Line Items — Gain on Transaction with Bonds.”

In addition, since 2002, the Argentine government has imposed duties on the exports of various primary and manufactured products, excluding services. During the last ten years, such export taxes have undergone significant increases, reaching a maximum of 35%. We cannot assure you that export taxes on our services will not be imposed. Imposition of export taxes on our services could adversely affect our financial condition or results of operations.

The Argentine government may order salary increases to be paid to employees in the private sector, which could increase our operating costs and adversely affect our results of operations.

In the past, the Argentine government has passed laws, regulations and decrees requiring companies in the private sector to increase wages and provide specified benefits to employees, and may do so again in the future. Argentine employers, both in the public and private sectors, have experienced significant pressure from their employees and labor organizations to increase wages and to provide additional employee benefits. Due to

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the high levels of inflation, employees and labor organizations are demanding significant wage increases. In August 2012, the Argentine government established a 25% increase in minimum monthly salary to 2,875 Argentine pesos, effective as of February 2013. The Argentine government increased the minimum salary to 3,300 Argentine pesos in August 2013 and to 3,600 Argentine pesos in January 2014. Due to high levels of inflation, employers in both the public and private sectors are experiencing significant pressure from unions and their employees to further increase salaries. During the first three months of 2014, various unions have agreed with employers’ associations on salary increases between 25% and 30%. Due to the acceleration of inflation and the devaluation of the Argentine peso during the latter part of 2013 and the beginning of 2014, it is possible that the Argentine government could adopt measures mandating salary increases and/or the provision of additional employee benefits in the future. If as a result of such measures future salary increases in Argentine peso exceed the pace of the devaluation of the Argentine peso, they could have a material and adverse effect on our expenses and business, results of operations and financial condition and, thus, on the trading prices for our common shares.

Our operating cash flows may be adversely affected if there is a delay in obtaining reimbursement of value-added tax credits from AFIP.

As of March 31, 2014, our Argentine operating subsidiary IAFH Global S.A. has recognized an aggregate of $5.4 million in value-added tax credits. These tax credits may be monetized by way of cash reimbursement from AFIP. Obtaining this cash reimbursement requires submission of a written request to AFIP, which is subject to its approval. In the event that AFIP delays its approval of the request for reimbursement of these value-added tax credits, our ability to monetize the value of those credits would be delayed, which could adversely affect the timing of our cash flows from operations.

Changes in Argentine tax laws may adversely affect the results of our operations, financial condition and cash flows.

In 2012, a proposal made by the Argentine tax authorities to amend various aspects of the Argentine income tax law was made public. Pursuant to the proposed bill, among other things, deductible losses (that can be deducted within the next five years) would be limited to 30% of the income earned in each fiscal year; capital gains obtained by foreign residents from the sale, exchange or disposition of securities would be subject to income tax; and payments made to individuals or entities located or incorporated in countries with low or no taxation would be subject to a withholding tax at a rate of 35% and would not be deductible. As of the date of this prospectus, this proposal has not yet been introduced in the Argentine Congress. If this bill is passed into law, the limitations on deductions may adversely affect the results of our Argentine subsidiaries’ operations.

In addition, in 2012, the Argentine government terminated the application of the treaties for the avoidance of double taxation that were in force with the Republic of Chile and Spain. Pursuant to these treaties, shares and other equity interests in local companies owned by Chilean or Spanish residents enjoyed a preferential tax treatment by which taxes on personal assets were not applicable. The decision to denounce and therefore terminate the above-mentioned taxation treaties was published in the Argentine Official Gazette (Boletín Oficial de la República Argentina) on July 13 and July 16, 2012. In accordance with the denouncement provisions set forth in both treaties, in most cases, the treaties ceased to be in effect as of January 1, 2013, and personal assets of certain Chilean and Spanish residents became subject to taxation. The termination of the treaty with Spain resulted in the imposition of Argentine withholding tax at a rate of 35%, effective January 1, 2013, on the distribution of dividends by our Argentine subsidiaries to our Spanish subsidiary, Spain Holdco, in excess of their taxable income accumulated by the end of the fiscal year immediately prior to the distribution of such dividends. In addition, interest paid by our Argentine subsidiaries on any indebtedness owed to Spain Holdco became subject to Argentine withholding tax at that same rate. In February 2013, the Spanish cabinet approved the execution of a new double-taxation treaty with Argentina. On November 27, 2013, the Argentine Congress approved the aforementioned treaty, which was published in the Argentine Official Gazette on December 18, 2013. This new treaty with Spain entered into force on December 23, 2013. This treaty replaces the previous double-taxation treaty between Argentina and Spain that was terminated on July 16, 2012.

On September 23, 2013, Argentine Law No. 26,893 amending the income tax law was enacted. According to the amendments, the distribution of dividends by Argentine companies is subject to withholding

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tax at a rate of 10% unless dividends are distributed to Argentine corporate entities, and the sale, exchange or disposition of shares and other securities not trading in, or listed on, capital markets and securities exchanges is subject to withholding tax at a rate of 15% when gains are recognized by any Argentine resident individual or foreign beneficiary. The distribution of dividends by our Argentine subsidiaries to Spain Holdco is subject to this withholding tax. These dividend distributions are treated as income tax credits for Spain Holdco. As a holding company, Spain Holdco does not generate significant revenues and may be unable to recover the tax credits generated by the distributions, which might then need to be written off. These amendments may adversely affect the results of our operations.

Argentina’s economic recovery since the 2001 – 2002 economic crisis has undergone a significant slowdown, and any further decline in Argentina’s rate of recovery could adversely affect our business, financial condition and results of operations.

Although general economic conditions in Argentina have recovered significantly since the 2001 – 2002 economic crisis, an ongoing slowdown suggests uncertainty as to whether the growth experienced during this period is sustainable. This is mainly because the economic growth was initially dependent on a significant devaluation of the Argentine peso, excess production capacity resulting from a long period of deep recession and high commodity prices. Furthermore, the economy has suffered a sustained erosion of direct investment and capital investment. The global economic crisis of 2008 led to a sudden economic decline in Argentina during 2009, accompanied by political and social unrest, inflationary and Argentine peso depreciation pressures and a lack of consumer and investor confidence. According to the INDEC, Argentina’s real GDP grew by 3.0% in 2013, 1.9% in 2012, 8.9% in 2011, 9.2% in 2010, 0.9% in 2009 and 6.8% in 2008. There is uncertainty as to whether Argentina will suffer a further decline in growth rate or as to the timing of more robust growth or even be able to maintain the current level of economic growth.

Economic conditions in Argentina during 2012, 2013 and 2014 have included increased inflation, continued demand for wage increases, a rising fiscal deficit, the legally required repayment of Argentina’s foreign debt in 2012 and a decrease in commercial growth. In addition, beginning in the second half of 2011, an increase in capital flight from Argentina has caused the Argentine government to strengthen its foreign exchange controls and eliminate subsidies to the private sector. During 2013 and 2014, foreign exchange restrictions have tightened and the government has imposed price controls on certain goods to control inflation.

A decline in international demand for Argentine products, a lack of stability and competitiveness of the Argentine peso against other currencies, a decline in confidence among consumers and foreign and domestic investors, a higher rate of inflation and future political uncertainties, among other factors, may affect the development of the Argentine economy, which could lead to reduced demand for our services, which could adversely affect our business, financial condition and results of operations.

Exposure to multiple provincial and municipal legislation and regulations could adversely affect our business or results of operations.

Argentina is a federal country with 23 provinces and one autonomous city (Buenos Aires), each of which, under the Argentine national constitution, has full power to enact legislation concerning taxes and other matters. Likewise, within each province, municipal governments have broad powers to regulate such matters. Due to the fact that our delivery centers are located in multiple provinces, we are also subject to multiple provincial and municipal legislation and regulations. Although we have not experienced any material adverse effects from this, future developments in provincial and municipal legislation concerning taxes, provincial regulations or other matters may adversely affect our business or results of operations.

Risks Related to the Offering and Our Common Shares

There is no previous public market for the sale of our common shares and the price of our common shares may be highly volatile.

We have not previously had any securities traded on any exchange and, as a result, have no trading history. We cannot predict the extent to which investor interest in our common shares will create or be able to maintain an active trading market, or how liquid that market will be in the future. 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:

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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 equity markets in general have experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies affected. These broad market and industry factors may materially harm the market price of our common shares, regardless of our operating performance. 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.

Holders of our common shares may experience losses due to increased volatility in the U.S. capital markets.

The U.S. capital markets have recently 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.

In addition, on August 5, 2011, Standard & Poor's Ratings Services (“S&P”) lowered the long-term sovereign credit rating of the U.S. government debt obligations from AAA to AA+. On November 28, 2011, Fitch Ratings downgraded its U.S. Government rating outlook to negative and stated that a downgrade of the U.S. sovereign credit rating would occur without a credible plan in place by 2013 to reduce the U.S. Government's deficit. These actions initially have had an adverse effect on capital markets in the United States and elsewhere, contributing to volatility and decreases in prices of many securities trading on the U.S. national exchanges, such as the NYSE. Further 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 have a material adverse impact on financial markets and economic conditions in the United States and worldwide. Any volatility in the capital markets in the United States or in other developed countries, whether resulting from a downgrade of the sovereign credit rating of U.S. debt obligations or otherwise, may have an adverse effect on the price of our common shares.

We will have broad discretion in how to use the net proceeds we receive from this offering and we may not apply the proceeds to uses with which all our shareholders agree or that produce income.

We have no specific allocation for the net proceeds we receive in this offering, and our management retains the right to utilize the net proceeds as it determines. We intend to use the net proceeds we receive from this offering to repay indebtedness, for capital expenditures, for future strategic acquisitions of, or investments in, other businesses or technologies that we believe will complement our current business and expansion strategies, and for general corporate and working capital purposes. We cannot assure you that management will be able to use the proceeds to effectively continue the growth of our business or that management will use the proceeds in a manner with which all our shareholders will agree. Pending their use, we intend to invest the net proceeds in short-term, investment-grade, interest-bearing securities, but such investments may not produce income or may lose value.

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You will experience immediate and substantial dilution in the book value of the common shares you purchase and you may face future dilution.

The initial public offering price for our common shares will be substantially higher than the net tangible book value per common share as of March 31, 2014. Purchasers of our common shares in this offering will therefore incur an immediate and substantial dilution of $9.52 in the net tangible book value per common share from the initial public offering price of $12.00 per common share. This dilution is due in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their common shares. In addition, we have issued options to acquire common shares. To the extent these options are exercised, there will be further dilution to investors in this offering. Moreover, if the underwriters exercise their option to purchase additional common shares from us or if we issue additional equity securities, you will experience additional dilution. See “Dilution.”

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, a decrease in the price of our common shares may also result in our becoming a PFIC. The composition of our income and our assets will also be affected by how, and how quickly, we spend the cash raised in this offering. 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 “Taxation — U.S. Federal Income Tax Considerations — Passive foreign investment company rules.”

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

We believe that our existing cash and cash equivalents, cash flows from operations, revolving line of credit and the proceeds to us from this offering will be sufficient to meet our anticipated cash needs for at least the next 12 months. We may, however, 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. 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 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 United States, Europe, and Latin America; and
global economic, political and other conditions in jurisdictions in which we do business.

Concentration of ownership among our existing executive officers, directors and principal shareholders may prevent new investors from influencing significant corporate decisions or adversely affect the trading price of our common shares.

On the closing date of this offering our executive officers, directors and principal shareholders will beneficially own, in the aggregate, approximately 77.78% of our outstanding common shares and will own options that will enable them to own, in the aggregate, approximately 0.61% of our outstanding common shares assuming no exercise of the underwriters’ option to purchase additional common shares. As a result, these shareholders will continue to have substantial control over us and be able to exercise significant

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influence over all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions, and will have significant influence over our management and policies. This concentration of influence could be disadvantageous to other shareholders with interests different from those of our officers, directors and principal shareholders. For example, our officers, directors and principal shareholders could delay or prevent an acquisition or merger even if the transaction would benefit other shareholders. In addition, this significant concentration of share ownership may adversely affect the trading price of our common shares because investors often perceive disadvantages in owning shares in companies with principal shareholders.

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 promulgated by the U.S. government, NYSE or other relevant regulatory authority.

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, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Sarbanes-Oxley Act of 2002, new SEC regulations and NYSE listing guidelines. 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, when we cease being an “emerging growth company” within the meaning of the rules under the Securities Act and become subject to Section 404(b), our external auditor’s 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 will be required to document and test our internal control procedures in order to satisfy the requirements of Section 404, which will require management assessments and certifications of the effectiveness of our internal control over financial reporting. During the course of our testing, we may identify deficiencies that we may not be able to remedy in time to meet our deadline for compliance with Section 404. We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. In addition, when we cease being an “emerging growth company” within the meaning of the rules under the Securities Act and become subject to Section 404(b), our independent registered public accounting firm will be required to report on the effectiveness of our internal control over financial reporting but may not be able or willing to issue an unqualified report. If we conclude that our internal control over financial reporting is not effective, we cannot be certain as to the timing of remediation actions and testing or their effect on our operations because there is presently no precedent available by which to measure compliance adequacy.

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If we are unable to conclude that we have effective internal control over financial reporting, our independent auditors (when we become subject to Section 404(b)) are unable to provide us with an unqualified report as required by Section 404, or we are required to restate our financial statements, 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.

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 deem important, which may result in our common shares being less attactive to investors.

We are an emerging growth company within the meaning of the Securities Act, and if we decide to take advantage of certain exemptions from various reporting requirements applicable to emerging growth companies, our common shares could be less attractive to investors.

We are an “emerging growth company” within the meaning of the rules under the Securities Act. We are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. In addition, we will not be subject to certain requirements of Section 404 including the additional level of review of our internal controls over financial reporting as may occur when outside auditors attest as to our those controls over financial reporting.

As a result, our shareholders may not have access to certain information they may deem important. We will remain an emerging growth company until the end of the fiscal year following the fifth anniversary of the closing date of this offering, though we may cease to be an emerging growth company earlier under certain circumstances, If the market value of our common shares held by non-affiliates exceeds $700 million as of any June 30 before that time and we have been subject to the reporting requirements of the Exchange Act for at least 12 months and have filed at least one annual report pursuant to such reporting requirements or if our revenues exceed $1 billion in a fiscal year, we would cease to be “emerging growth company” as of December 31 of that year. We would also cease to be an “emerging growth company” on the date on which we issue more than $1 billion in non-convertible debt in a three year period. If we take advantage of any of these exemptions, investors may find our common shares less attractive as a result, which, in turn, could lead to a less active trading market for our common shares and volatility in our share price.

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 from time to time (loi du 10 août 1915 sur les sociétés commerciales telle que modifiée) (“Luxembourg Corporate 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 Corporate Law, our

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articles of association authorize the declaration of dividends more frequently than annually by the board of directors in the form of interim dividends so long as the amount of such interim dividends does not exceed total net profits made since the end of the last financial year for which the annual accounts have been approved, plus any profits 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 are a holding company and 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.

We are a holding company and 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. See “— Risks Related to Operating in Latin America and Argentina — Argentina — Restrictions on transfers of foreign currency and the repatriation of capital from Argentina may impair our ability to receive dividends and distributions from, and the proceeds of any sale of, our assets in Argentina.”

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.

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 Corporate Law, our shareholders benefit from a pre-emptive subscription right on the issuance of common shares for cash consideration. However, the general meeting of shareholders will, in accordance with Luxembourg law, waive and suppress and authorize the board to suppress, waive or limit any pre-emptive subscription rights of shareholders provided by Luxembourg law to the extent the board deems such suppression, waiver or limitation advisable for any issuance or issuances of common shares within the scope of our authorized share capital prior to the pricing. Such common shares may be issued above, at or below market value as well as by way of incorporation of available reserves (including premium). 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 Corporate 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.

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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 prospectus 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 prospectus (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 such provision in an action brought in the United States under U.S. federal or state securities laws, such provision could make enforcing judgments obtained outside Luxembourg more difficult to enforce against our assets in Luxembourg or jurisdictions that would apply Luxembourg law.

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, Council Regulation (EC) No. 1346/2000 of May 29,

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2000 on insolvency proceedings. 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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FORWARD-LOOKING STATEMENTS

This prospectus 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 prospectus, 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.

Before you invest in our common shares, you should carefully consider all the information in this prospectus, including the information set forth under “Risk Factors.” We believe our primary challenges are:

If we are unable to maintain 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, we may not have the necessary resources to maintain client relationships, and competition for such IT professionals could materially adversely affect our business, financial condition and 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;
We may not be able to achieve our anticipated growth, which could materially adversely affect our revenues, results of operations, business and prospects;
We may be unable to effectively manage our rapid growth, which could place significant strain on our management personnel, systems and resources;
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 operation 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 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 derive a significant portion of our revenues from clients located in the United States and, to a lesser extent, Europe. Worsening general economic conditions in the United States, Europe or globally could materially adversely affect our revenues, margins, results of operations and financial condition;
Uncertainty concerning the instability in the current economic, political and social environment in Argentina may have an adverse impact on capital flows and could adversely affect our business, financial condition and results of operations;
Argentina’s regulations on proceeds from the export of services may increase our exposure to fluctuations in the value of the Argentine peso, which, in turn, could have an adverse effect on our operations and the market price of our common shares. The imposition in the future of additional regulations on proceeds collected outside Argentina for services rendered to non-Argentine residents or of export duties and controls could also have an adverse effect on us; and
Our greater than 5% shareholders, directors and executive officers and entities affiliated with them will beneficially own approximately 77.78% of our outstanding common shares after this offering,

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which includes approximately 18.48%, 22.90% and 14.05% of our outstanding common shares after this offering which will be owned by affiliates of WPP, Riverwood Capital and FTV Capital, respectively. These insiders will therefore continue to have substantial control over us after this offering and could prevent new investors from influencing significant corporate decisions, such as approval of key transactions, including a change of control.

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. Investors should read “Risk Factors” in this prospectus and the description of our business under “Business” in this prospectus 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.

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CURRENCY PRESENTATION AND DEFINITIONS

In this prospectus, all references to “U.S. dollars” and “$” are to the lawful currency of the United States, all references to “Argentine pesos” are to the lawful currency of the Republic of Argentina, all references to “Colombian pesos” are to the lawful currency of the Republic of Colombia, all references to “Uruguayan pesos” are to the lawful currency of the Eastern Republic of Uruguay and all references to “euro” or “€” are 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. All references to the “pound,” “British Sterling pound” or “£” are to the lawful currency of the United Kingdom.

Unless otherwise specified or the context requires otherwise in this prospectus:

“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;
“ISO 9001:2008” means a quality management software developed by the ISO designed to help companies ensure they meet the standards of customers and other stakeholders;
“Agile development methodologies” means a group of software development methods based on iterative and incremental development, where requirements and solutions evolve through collaboration between self-organizing, cross-functional teams; and
“Attrition Rate,” during a specific period, refers to the ratio of IT professionals that left our company during the period to the number of IT professionals that were on our payroll on the last day of the period.

“GLOBANT” and its logo are our trademarks. Solely for convenience, we refer to our trademarks in this prospectus 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 prospectus are the property of their respective owners.

PRESENTATION OF FINANCIAL INFORMATION

Our financial statements are prepared under International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and presented in U.S. dollars because the U.S. dollar is our functional currency. Our fiscal year ends on December 31 of each year. Accordingly, all references to a particular year are to the year ended December 31 of that year. Some percentages and amounts included in this prospectus 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.

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PRESENTATION OF INDUSTRY AND MARKET DATA

In this prospectus, 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 prospectus were obtained from International Data Corporation (“IDC”), Gartner, Inc. (“Gartner”), 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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USE OF PROCEEDS

We estimate that the net proceeds to us from this offering will be approximately $33.2 million, assuming an initial public offering price of $12.00 per common share (the midpoint of the range set forth on the cover page of this prospectus), after deducting estimated underwriting discounts and commissions and estimated offering expenses. Each $1.00 increase (decrease) in the public offering price per common share would increase (decrease) our net proceeds, after deducting estimated underwriting discounts and commissions and estimated offering expenses, by $3.2 million.

The principal reasons for this offering are to increase our capitalization and financial flexibility, increase our visibility in the marketplace and create a public market for our common shares. We intend to use the net proceeds as follows:

approximately $8 – 10 million to repay all or part of our U.S. subsidiary’s working capital facility with Bridge Bank, as well as certain lines of credit of our principal Argentine subsidiary. Advances under the working capital facility accrue interest at Bridge Bank’s prime rate plus an applicable margin ranging from 3.25% to 4.00%, depending on the amounts drawn, which is due monthly, and the maturity date of the facility is May 6, 2015. Our principal Argentine subsidiary’s lines of credit are denominated in Argentine pesos and bear interest at fixed rates ranging from 7.0% to 21.5% and have maturity dates ranging from June 2014 to December 2017;
approximately $10 – 12 million for capital expenditures associated with investments in new offices and IT infrastructure to support our planned growth;
approximately $12 – 15 million for future strategic acquisitions of, or investments in, other businesses or technologies that we believe will complement our current business and expansion strategies. We have no definitive agreements or understandings with respect to any such acquisitions or investments, however, we continue to seek new acquisition opportunities; and
any remaining amount for general corporate and working capital purposes.

However, we have no specific allocation for the use of the net proceeds to us from this offering, and our management retains the right to utilize the net proceeds as it determines. The actual allocation of our resources to the above or other uses will depend on the needs and opportunities that our management perceives at the time of allocation.

Pending such use, we intend to invest the net proceeds in a diversified portfolio of short-term, investment-grade, interest-bearing securities, such as certificates of deposit, repurchase agreements, commercial paper, government obligations and sovereign and corporate bonds.

We will not receive any of the proceeds from the sale of common shares by the selling shareholders.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2014:

on an actual basis; and
on an as adjusted basis to reflect the sale by us of 3,400,000 common shares in this offering, at an assumed public offering price of $12.00 per common share, the midpoint of the range set forth on the cover page of this prospectus, after deduction of estimated underwriting discounts and commissions and estimated offering expenses.

This table should be read in conjunction with “Selected Consolidated Financial Data,” “Operating and Financial Review and Prospects” and the audited and unaudited consolidated financial statements and notes thereto included elsewhere in this prospectus.

   
  As of March 31, 2014
     Actual   As Adjusted(1)
     (in thousands)
Cash and cash equivalents(2)   $ 13,191           
Borrowings
                 
Current   $ 815           
Non-current     10,373           
Total borrowings(3)   $ 11,188           
Capital and reserves
                 
Issued and paid-in capital   $ 34,794           
Additional paid-in capital     12,476           
Foreign currency translation reserve     (124 )          
Retained earnings     15,761           
Equity attributable to owners of the company     62,907           
Non-controlling interests     544           
Total equity   $ 63,451           
Total capitalization   $ 74,639           

(1) A $1.00 increase (decrease) in the assumed initial public offering price of $12.00 per common share, which is the mid-point of the price range listed on the cover page of this prospectus, would increase (decrease) the as adjusted amount of each of cash and cash equivalents, additional paid-in capital and total capitalization by approximately $3.2 million, assuming that the number of common shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.
(2) Cash and cash equivalents as of March 31, 2014, as adjusted, reflects the payment of approximately $2.4 million of our estimated offering expenses as of the date of this prospectus.
(3) Of such total borrowings, $9.4 million were drawn under our U.S. subsidiary’s working capital facility with Bridge Bank that is secured by all of its trade receivables, equipment, inventory, and certain other personal property.

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DILUTION

Dilution is the amount by which the portion of the offering price per common share paid by the purchasers of our common shares in this offering exceeds the net tangible book value per common share after the offering. Our pro forma net tangible book value as of March 31, 2014 was $44.5 million, or $1.54 per common share. Pro forma net tangible book value per common share is determined by dividing our tangible net worth, total tangible assets less total liabilities, by the aggregate number of common shares outstanding.

After giving effect to the issue and sale by us of the common shares in this offering, at an assumed public offering price of $12.00 per common share, the midpoint of the range set forth on the cover page of this prospectus, and the receipt and application of the net proceeds to us, our pro forma net tangible book value as of March 31, 2014 would have been $80.4 million, or $2.48 per common share. This represents an immediate increase in pro forma net tangible book value to existing shareholders of $0.94 per common share and an immediate dilution to new investors of $9.52 per common share.

The following table illustrates this per common share dilution:

 
Assumed initial offering price   $ 12.00  
Pro forma net tangible book value per common share as of March 31, 2014   $ 1.54  
Increase in pro forma net tangible book value per common share attributable to new investors   $ 0.94  
Pro forma net tangible book value per common share after offering   $ 2.48  
Dilution per common share to new investors   $ 9.52  

Dilution is determined by subtracting pro forma net tangible book value per common share after the offering from the initial public offering price per common share.

The following table sets forth, on a pro forma basis, as of March 31, 2014, the number of common shares purchased from us, the total consideration paid, or to be paid, and the average price per common share paid, or to be paid, by existing shareholders and by the new investors, at an assumed public offering price of $12.00 per common share, the midpoint of the range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions, and offering expenses payable by us:

         
  Common Shares Purchased   Total Consideration   Average Price Per Common Share
     Number   Percent   Number   Percent
Existing shareholders     28,995,158       89.50 %    $ 44,652,543       52.25 %    $ 1.54  
New investors     3,400,000       10.50 %    $ 40,800,000       47.75 %    $ 12.00  
Total     32,395,158       100.00 %    $ 85,452,543       100.00 %          

Sales by the selling shareholders in this offering will reduce the number of common shares held by existing shareholders to 26,095,158, or approximately 10.0%, and will increase the number of common shares to be purchased by new investors to 6,300,000, or approximately 19.4%, of the total common shares outstanding after the offering.

The foregoing tables assume no exercise of the underwriters’ over-allotment option or of share options outstanding as of March 31, 2014. As of March 31, 2014, 1,141,840 common shares were subject to outstanding options, at a weighted average exercise price of $3.2572 per common share. To the extent these options are exercised there will be further dilution to new investors.

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EXCHANGE RATES

A significant portion of our operating income is exposed to foreign exchange fluctuations. We are primarily exposed to fluctuations in the exchange rates among the U.S. dollar and the Argentine peso. See also “Operating and Financial Review and Prospects — Quantitative and Qualitative Disclosures about Market Risk.”

Argentine Pesos

From April 1, 1991 until the end of 2001, the Convertibility Law No. 23,928 and Regulatory Decree No. 529/91 (together, the “Convertibility Law”) established a fixed exchange rate under which the Argentine Central Bank was obliged to sell U.S. dollars at a fixed rate of one Argentina peso per U.S. dollar. On January 6, 2002, the Argentine Congress enacted the the Public Emergency and Exchange Regime Reform Act (the “Public Emergency Law”), which suspended certain provisions of the Convertibility Law, including the fixed exchange rate of one Argentine peso to $1.00, and granted the executive branch of the Argentine government the power to set the exchange rate between the Argentine peso and foreign currencies and to issue regulations related to the foreign exchange market. Following a brief period during which the Argentine government established a temporary dual exchange rate system, pursuant to the Public Emergency Law, the Argentine peso has been allowed to float against other currencies with periodic intervention by the Argentine Central Bank. In recent years, increasing inflation is generating pressure for further depreciation of the Argentine peso. The Argentine peso depreciated 10.1% against the U.S. dollar in 2009, 4.7% in 2010, 8.0% in 2011, 14.4% in 2012 and 32.5% in 2013. For the three months ended March 31, 2014, the Argentine pesos depreciated 22.8% against the U.S. dollar. The significant restrictions on the purchase of foreign exchange have given rise to the development of an implied rate of exchange and to an increase in the sale price in Argentine pesos of securities denominated in foreign currency. The implied rate of exchange may increase or decrease in the future. We cannot predict future fluctuations in the exchange rate of the Argentine peso against the U.S. dollar.

The following table sets forth the annual high, low, average and period-end official exchange rates for the periods indicated, expressed in Argentine pesos per U.S. dollar and not adjusted for inflation according to the Argentine Central Bank. We cannot assure you that the Argentine peso will not depreciate or appreciate again in the future. The Federal Reserve Bank of New York does not report a noon buying rate for Argentine pesos.

       
  Exchange Rate
     High   Low   Average   Period End
     (Argentine peso per U.S. dollar)
Year Ended December 31,
                                   
2009     3.85       3.45       3.73       3.80  
2010     3.99       3.79       3.91       3.98  
2011     4.30       3.97       4.13       4.30  
2012     4.92       4.30       4.55       4.92  
2013     6.52       4.92       5.48       6.52  
2014
 
January 2014     8.02       6.54       7.10       8.02  
February 2014     8.02       7.76       7.86       7.88  
March 2014     8.01       7.87       7.93       8.01  
April 2014     8.00       8.00       8.00       8.00  
May 2014     8.08       8.00       8.04       8.08  
June 2014 (through June 27, 2014)     8.14       8.08       8.13       8.13  

Source: Argentine Central Bank

The official exchange rate on June 27, 2014 was 8.13 Argentine pesos to $1.00.

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SELECTED CONSOLIDATED FINANCIAL DATA

The following summary consolidated financial and other data of Globant S.A. should be read in conjunction with, and are qualified by reference to, “Operating and Financial Review and Prospects” and our audited consolidated financial statements and notes thereto included elsewhere in this prospectus. The summary consolidated financial data as of December 31, 2013 and 2012 and for the three years ended December 31, 2013, 2012 and 2011 are derived from the audited consolidated financial statements of Globant S.A. included elsewhere in this prospectus and should be read in conjunction with those audited consolidated financial statements and notes thereto. Our summary consolidated financial data as of December 31, 2011 set forth below was derived from our audited consolidated financial statements for the year end December 31, 2012, which are not included in this prospectus. The selected consolidated financial data as of March 31, 2014 and for the three months ended March 31, 2014 and 2013 are derived from the unaudited condensed interim consolidated financial statements of Globant S.A. included elsewhere in this prospectus and should be read in conjunction with those unaudited condensed interim consolidated financial statements and notes thereto. The unaudited condensed interim consolidated financial statements have been prepared on the same basis as the audited consolidated financials statements and, in the opinion of our management, include all normal recurring adjustments necessary for a fair presentation of the information set forth therein. Our historical results are not necessarily indicative of the results that may be expected for the year ending December 31, 2014 or any other future period.

         
  Three months
ended March 31,
  Year ended
December 31,
     2014   2013   2013   2012   2011
     (in thousands,
except for percentages
and per share data)
  (in thousands,
except for percentages
and per share data)
Consolidated Statements of profit or loss and other comprehensive income:
                                            
Revenues   $ 43,125     $ 34,351     $ 158,324     $ 128,849     $ 90,073  
Cost of revenues(1)     (26,359 )      (22,076 )      (99,603 )      (80,612 )      (53,604 ) 
Gross profit     16,766       12,275       58,721       48,237       36,469  
Selling, general and administrative expenses(2)     (12,941 )      (11,567 )      (54,841 )      (47,680 )      (26,538 ) 
Impairment of tax credits     (416 )            (9,579 )             
Profit (Loss) from operations     3,409       708       (5,699 )      557       9,931  
Gain on transaction with bonds(3)     2,606       3,107       29,577              
Finance income     4,516       123       4,435       378        
Finance expense     (5,458 )      (862 )      (10,040 )      (2,687 )      (1,151 ) 
Finance expense, net(4)     (942 )      (739 )      (5,605 )      (2,309 )      (1,151 ) 
Other income and expenses, net(5)     (33 )            1,505       291       (3 ) 
Profit (Loss) before income tax     5,040       3,076       19,778       (1,461 )      8,777  
Income tax(6)     (1,616 )      (687 )      (6,009 )      160       (1,689 ) 
Profit (Loss) for the period/year   $ 3,424     $ 2,389     $ 13,769     $ (1,301 )    $ 7,088  
Earnings (Loss) per share:
                                            
Basic(7)   $ 0.12     $ 0.08     $ 0.50     $ (0.06 )    $ 0.25  
Diluted(7)   $ 0.11     $ 0.08     $ 0.48     $ (0.06 )    $ 0.25  
Weighted average number of outstanding shares (in thousands)
                                            
Basic     28,995       27,679       27,891       27,288       27,019  
Diluted     29,957       29,761       28,884       27,288       27,019  
Other data:
                                            
Adjusted gross profit(8)   $ 17,625     $ 12,989     $ 62,126     $ 54,845     $ 38,014  
Adjusted gross profit margin percentage(8)     40.9 %      37.8 %      39.2 %      42.6 %      42.2 % 
Adjusted selling, general and administrative expenses(8)   $ (11,999 )    $ (10,570 )    $ (50,297 )    $ (37,809 )    $ (25,584 ) 
Adjusted profit from operations(9)     3,833       790       4,673       12,266       9,931  
Adjusted profit from operations margin percentage(9)     8.9 %      2.3 %      3.0 %      9.5 %      11.0 % 
Adjusted profit for the period/year(10)   $ 3,432     $ 2,471     $ 14,562     $ 10,408     $ 7,088  
Adjusted profit margin percentage for the period/year(10)     8.0 %      7.2 %      9.2 %      8.1 %      7.9 % 

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(1) Includes depreciation and amortization expense of $855, $681, $3,215, $1,964 and $1,545 for the three months ended March 31, 2014 and 2013 and for the years ended December 31, 2013, 2012 and 2011, respectively. Also includes transactions with related parties for an amount of $2,901 and $1,169 for the years ended December 31, 2012 and 2011, respectively. There were no related party transactions for the three months ended March 31, 2014 and 2013 and for the year ended December 31, 2013. Finally, includes share-based compensation expense of $4, $33, $190 and $4,644 for the three months ended March 31, 2014 and 2013 and for the years ended December 31, 2013 and 2012, respectively. There was no share-based compensation expense for the year ended December 31, 2011.
(2) Includes depreciation and amortization expense of $938, $948, $3,941, $2,806 and $954 for the three months ended March 31, 2014 and 2013 and for the years ended December 31, 2013, 2012 and 2011, respectively. Also includes transactions with related parties for an amount of $1,381 and $931 for the years ended December 31, 2013, 2012 and 2011, respectively. There were no related party transactions for the three months ended March 31, 2014 and 2013 and for the year ended December 31, 2013. Finally, includes share-based compensation expense of $4, $49, $603 and $7,065 for the three months ended March 31, 2014 and 2013 and for the years ended December 31, 2013 and 2012, respectively. There was no share-based compensation expense for the year ended December 31, 2011.
(3) Includes gain on transactions with bonds of $2,606 from proceeds received by our Argentine subsidiaries through capitalizations for the three months ended March 31, 2014 and gains on transactions with bonds of $3,107 and $29,577 from proceeds received by our Argentine subsidiaries as payments from exports for the three months ended March 31, 2013 and the year ended December 31, 2013, respectively.
(4) Includes net foreign exchange loss of $1,169 and $334 for the three months ended March 31, 2014 and 2013, respectively, and $4,238, $1,098 and $548 for the years ended December 31, 2013, 2012 and 2011, respectively.
(5) Includes a $1,703 gain on remeasurement of the contingent consideration related to the acquisition of TerraForum for the year ended December 31, 2013.
(6) Includes deferred tax of $529, $2,479 and $109 for the years ended December 31, 2013, 2012 and 2011, respectively.
(7) Includes the retroactive effect on our common shares of our reorganization as a Luxembourg company and our 1-to-12 reverse share split for each of the years and periods presented. See notes 1.1 and 31.4 to our audited consolidated financial statements for more information about the reorganization and the reverse share split, respectively.
(8) To supplement our gross profit presented in accordance with IFRS, we use the non-IFRS financial measure of adjusted gross profit, which is adjusted from gross profit, the most comparable IFRS measure, to exclude depreciation and amortization expense and share-based compensation expense included in cost of revenues. For a reconciliation of gross profit to adjusted gross profit, see footnote 9. We also present the non-IFRS financial measure of adjusted gross profit margin percentage, which reflects adjusted gross profit margin as a percentage of revenues. To supplement our selling, general and administrative expenses presented in accordance with IFRS, we use the non-IFRS financial measure of adjusted selling, general and administrative expenses, which is adjusted from selling, general and administrative expenses, the most comparable IFRS measure, to exclude depreciation and amortization expense and share-based compensation expense included in selling, general and administrative expenses. For a reconciliation of selling, general and administrative expenses to adjusted selling, general and administrative expenses, see footnote 8. We believe that excluding such depreciation and amortization and share-based compensation expense amounts from gross profit and selling, general and administrative expenses and depreciation and amortization expense and share-based compensation expense included in cost of revenues as a percentage of revenues from gross profit margin helps investors compare us and similar companies that exclude depreciation and amortization expense and share-based compensation expense from gross profit and selling, general and administrative expenses and depreciation and amortization expense and share-based compensation expense included in cost of revenues as a percentage of revenues from gross profit margin. These non-IFRS financial measures are provided as additional information to enhance investors’ overall understanding of the historical and current financial performance of our operations. These non-IFRS financial measures should be considered in addition to results prepared in accordance with IFRS, but should not be considered as substitutes for or superior to IFRS results. In addition, our calculation of these non-IFRS financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

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(9) To supplement our profit (loss) from operations presented in accordance with IFRS, we use the non-IFRS financial measure of adjusted profit from operations, which is adjusted from profit from operations, the most comparable IFRS measure, to exclude share-based compensation expense and impairment of tax credits. For a reconciliation of profit from operations, to adjusted profit from operations, see footnote 9. In addition, we present the non-IFRS financial measure of adjusted profit from operations margin percentage, which reflects adjusted profit from operations as a percentage of revenues. These non-IFRS financial measures are provided as additional information to enhance investors’ overall understanding of the historical and current financial performance of our operations. These non-IFRS financial measures should be considered in addition to results prepared in accordance with IFRS, but should not be considered as substitutes for or superior to IFRS results. In addition, our calculation of these non-IFRS financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.
(10) To supplement our profit (loss) presented in accordance with IFRS, we use the non-IFRS financial measure of adjusted profit for the year, which is adjusted from profit (loss) for the year, the most comparable IFRS measure, to exclude share-based compensation expense. In addition, we present the non-IFRS financial measure of adjusted profit margin percentage for the year, which reflects adjusted profit for the year as a percentage of revenues. These non-IFRS financial measures are provided as additional information to enhance investor’s overall understanding of the historical and current financial performance of our operations. These non-IFRS financial measures should be considered in addition to results prepared in accordance with IFRS, but should not be considered as substitutes for or superior to IFRS results. In addition, our calculation of these non-IFRS financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

         
  Three months ended March 31,   Year ended
December 31,
     2014   2013   2013   2012   2011
     (in thousands, except for
percentages)
  (in thousands, except for
percentages)
Reconciliation of adjusted gross profit
                                            
Gross profit   $ 16,766     $ 12,275     $ 58,721     $ 48,237     $ 36,469  
Adjustments
                                            
Depreciation and amortization expense     855       681       3,215       1,964       1,545  
Share-based compensation expense     4     $ 33       190       4,644        
Adjusted gross profit   $ 17,625     $ 12,989     $ 62,126     $ 54,845     $ 38,014  
Reconciliation of adjusted selling, general and administrative expenses
                                            
Selling, general and administrative expenses   $ (12,941 )    $ (11,567 )    $ (54,841 )    $ (47,680 )    $ (26,538 ) 
Adjustments
                                            
Depreciation and amortization expense     938       948       3,941       2,806       954  
Share-based compensation expense     4       49       603       7,065        
Adjusted selling, general and administrative expenses   $ (11,999 )    $ (10,570 )      (50,297 )    $ (37,809 )    $ (25,584 ) 
Reconciliation of adjusted profit from operations
                                            
Profit (Loss) from operations   $ 3,409     $ 708     $ (5,699 )    $ 557     $ 9,931  
Adjustments
                                            
Impairment of tax credits     416             9,579              
Share-based compensation expense     8       82       793       11,709        
Adjusted profit from operations   $ 3,833     $ 790     $ 4,673     $ 12,266     $ 9,931  
Reconciliation of adjusted profit for the period/year
                                            
Profit (loss) for the period/year   $ 3,424     $ 2,389     $ 13,769     $ (1,301 )    $ 7,088  
Adjustments
                                            
Share-based compensation expense     8       82       793       11,709        
Adjusted profit for the period/year   $ 3,432     $ 2,471     $ 14,562     $ 10,408     $ 7,088  

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  As of March 31,   As of December 31,
     2014   2013   2012   2011
     (in thousands)   (in thousands)
Consolidated statements of financial position data:
                                   
Cash and cash equivalents   $ 13,191     $ 17,051     $ 7,685     $ 7,013  
Restricted cash equivalent     361                    
Investments     11,493       9,634       914       2,234  
Trade receivables     34,390       34,418       27,847       19,865  
Other receivables (current and non-current)     12,863       12,333       17,997       13,735  
Deferred tax assets     3,406       3,117       2,588       109  
Investment in associates     450                    
Other financial assets     984       1,284              
Property and equipment     15,952       14,723       10,865       8,540  
Intangible assets     5,786       6,141       4,305       1,488  
Goodwill     13,128       13,046       9,181       6,389  
Total assets   $ 112,004     $ 111,747     $ 81,382     $ 59,373  
Trade payables     4,499     $ 8,016     $ 3,994     $ 2,848  
Payroll and social security taxes payable     17,994       17,823       13,703       9,872  
Borrowings (current and non-current)     11,188       11,795       11,782       8,936  
Other financial liabilities (current and non-current)     8,390       8,763       6,537       4,046  
Tax liabilities     5,885       5,190       1,440       584  
Other liabilities (current and non-current)     322       24       700       69  
Provisions for contingencies     275       271       288       269  
Total liabilities   $ 48,553     $ 51,882     $ 38,444     $ 26,624  
Total equity   $ 63,451     $ 59,865     $ 42,938     $ 32,749  
Total equity and liabilities   $ 112,004     $ 111,747     $ 81,382     $ 59,373  

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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 prospectus. Our consolidated financial statements have been prepared in accordance with IFRS.

Overview

We are a new-breed technology services provider focused on delivering innovative software solutions by leveraging emerging technologies and related market trends. Over the last several years, a number of new technologies and related market trends, including mobility, cloud computing and software as a service, gamification, social media, wearables, internet of things and big data have emerged that are revolutionizing the way end-users interface with information technology and are reshaping the business and competitive landscape for enterprises. As enterprises adapt their business models to benefit from these changes, they are increasingly seeking solutions that not only meet the rigorous engineering requirements of emerging technologies, but that also engage the end-user in new and powerful ways.

At Globant, we seek to deliver the optimal blend of engineering, design, and innovation to harness the potential of emerging technologies for our clients. Our commitment to this differentiated approach is reflected in three core tenets: organization by technology-specialized Studios; emphasis on a collaborative and open Culture; and Innovation and creativity in technology and design.

Our Studios embody our core competencies in cutting-edge technologies and practices, including: Consumer Experience, Gaming, Big Data and High Performance, Quality Engineering, Enterprise Consumerization, UX and Social, Mobile, Wearables and Internet of Things, After Going Live, Digital Content, Product Innovation, and Cloud Computing and Infrastructure. We believe that our Studio model, rather than the more typical industry vertical segmentation, allows us to optimize our expertise in emerging technologies and related market trends for our clients, regardless of their industry. Each Studio serves multiple industries and individual projects frequently involve multiple Studios.

We provide our services through a network of 25 delivery centers in Argentina, Uruguay, Colombia, Mexico and the United States, supported by four client management locations in the United States, and one client management location in each of the United Kingdom, Colombia, Uruguay, Argentina and Brazil. Our reputation for cutting-edge work for global blue chip clients and our footprint across Latin America provide us with the ability to attract and retain well-educated and talented professionals in the region. We are culturally similar to our clients and we function in similar time zones. We believe that these similarities have helped us build solid relationships with our clients in the United States and Europe