Globant's Biggest Weakness Transforms into a Temporary Strength

IT consulting specialist Globant (NYSE: GLOB) is proving that it's an indispensable partner to its base of large enterprise customers. The technology outsourcing company, which offers "digital and cognitive transformation" services, issued its second-quarter 2020 earnings on Aug. 13.

Globant reported healthy expansion on its top line as revenue rose 16% over the prior-year quarter to nearly $183 million. Gross margin dipped by 230 basis points to 36.2%; this was due to a slightly higher headcount of consulting professionals during the quarter versus optimal staffing for the level of sales achieved.

The lower gross margin hurt Globant's bottom line, as the quarter's $10 million in net income represented a net profit margin of 5.5%, or roughly 300 basis points below the 8.5% net profit margin the company booked in the second quarter of 2019.

Source Fool.com