Globant S.A. (GLOB) Earnings Call Transcript & Summary

And I really love the concept of making things simple, especially in those projects. If it's hard for me on the weekends to figure out how to make 1 of my projects, I can't really figure out 1 of those big projects. It's really a good concept of games, right? We've been working, building AAA games for many of the main studios for many years. And I remember a talk in the game development conference, I think it was 2016, where NASA came in and they give a talk call, we are the space invaders. I don't want to spoil it for you, but they're actually saying we spend [ 36 million ] training each pilot just to fly a plane and every kids learning how to pilot a whole space fleet in a week in their basement. So there is so much that you can learn about using gamified experiences to have people engage with learning in a different way. And we've been doing a lot and I think just 1 case, where we've used game-like technology in different industries. Plus when COVID hit, we -- Nissan was launching the Ariya, the car, and there was no way to get everybody in the room to show the car. So we create a virtual showroom together with them to -- for them to be able to share that in the launch. That's just 1 case that I think it's interesting for retail. It's appealing, and it's actually similar to something that we've seen because everybody has been able to, if a shelf is going to fit in their living room or what else. So this is very natural. There are cases like that are important, but then there are also very interesting cases that and we expanded from that. So we thought of going a little bit further.

And we don't want you to get caught up into any of these specific examples. As we will zoom out a little bit, are there themes that at Stanley Black & Decker, we have identified for the use cases for specifically productivity or impacting our end customer. And these are 3 themes which are coming out, which came out really, really early to us. Training for our users and consumers to use our tools more actively so that they are safe. If you're thinking about -- I'll give you an example of angle grinder. If you -- it's a very simple too, a lot many people would say, but the pros, who use it know exactly what you were talking about, and we're going to see some applications to it. Changing of disk or a blade on a angle grinder could be an art in itself. And the direct safety of that tool depends on how it is operated. And while Stanley Black & Decker and we hold ourselves as [ devolve ] in the highest esteem and knowing guaranteed tough and trying to provide as much information and education to our users. Many times, we all know that information remains printed into physical format of manuals. The whole world has moved on to digital, while our most critical important pieces of training, safety and others remain in physical. And how do we transition that journey to next little to make things more secure, which is again going to drive that training directly associated through data and AI association, personalized versions of safety and security. How do you use certain tools on the job site? How do you make it more effective? And if you use a tool properly, your repairs and breakdown of those tools remain very, very less. So it's a circle, which starts from productivity and brings you safety back to profitability. And we have seen this very common length of these applications coming to.

Yes. And I think these cases are very interesting. They apply to Stanley Black & Decker, but safety, security, training repairs equally very much interesting for any of your channel partners as well. So we wanted to bring this to life in the context of NRF, how this technology can be really helpful? So we decided to make a PLC. And before this -- before it's too late, [ Mika ] if you can shut off the audio because we're going to voice it over and this might be competing with my audio. So 1 thing that we worked with was Magic Leap. And can you pause for a second, Mika? Just 1 context for anybody that doesn't know about Magic Lip they were doing the most all the expo in our booth, if you want to come in and see them all, I definitely recommend. They're not like a quest, a quest is a VR experience. Magic Leap is more like a mixed reality, and it lets you do fully 3D mix reality and it allows you to mix things that you have in your physical world with virtual devices. So you're going to see something that -- it resembles AR, but this is actually 3D you can use Goggles. And if you can play now Mika. What you're going to be seeing is a case where our developer is actually looking on a list of products at the top. So you can basically have a list of products that you're seeing. And in that list of product, you might be able to pull 1 of those products down. And you're going to see how he, on the 1 hand, is interacting with a physical drill. And on the other hand, he is actually interacting with a virtual tool. And this allows you, because you have the tool in front of you to not only play with accessories that you have in the physical world, but even maybe filter the accessories that are applicable to this device and for you to experience with them and see how they work together. At the same time, I'm not sure if you've worked with an angle grinder, it can be a scary tool, and you really need to know how to do it. So what you're seeing is a little bit of an unboxing reimagined, he in this case, has a virtual tool, but he could very much have a physical tool in his hand. And what he's doing is he's interacting with the things that you would play with after you've got on the tool. On the 1 hand, he's got the virtual PDF, who watches the instructions, and he's watching tutorial at the same time in media content in a video, where they're explaining how to change the disk. And it's important to do it. Well, for safety reasons, and in this particular case, it's not only being able to interface with a Digital Twin of the tool, but also overlay, both the print and the video content that helps them learn how to use it. This is a little bit of a rethinking of the post purchase experience. This is the training portion of that, but it's not limited to that. We chose to use Magic leap because they have some platforms that allow you to do these POC fairly quickly. And you can not only use it to experience something, but also you can collaborate. So basically, you could have several people watching the same Digital Twins or VR objects in sharing a collaboration session, not only for people that are present, but actually for people that are remote. So if you're troubleshooting something on your device, you could very much have someone that's around the world connect to your use case, see what you're seeing, help you figure out the content annotate things as you're working out and help you troubleshoot an environment. And that's where we thought this is going beyond the usual case of discovery of a tool, but this is actually helping collaborating before the purchase and after the purchase in the whole journey that brings together a manufacturer, a consumer and a retailer.

I think 1 thing to notice in this video, if you guys have observed, it's the experience of the user and what does that mean? It's the journey that has evolved. The -- if you're talking about doing a digital experience, you are most probably talking about either seeing a video or seeing a PDF open or seeing an Amazon opened or having a tool. It does not necessarily in digital world to that replicate the journey of our user experience from end-to-end. It is broken into smaller parts. Yes, our customers go through that today. But as the technology and the devices are pushing to the next level, that's going to pivot. And that's the opportunity that we're going to talk a little bit about as our learnings. But before we definitely wanted to give a shout out, I don't want to skip that slide that we had the previous one.

Yes. Just 1 quick comment. It was shout out to Magic Leap for their platform. I think it was super interesting. It was really useful to make it happen really quickly. To the point that this morning, I ask Matthew, that's Matthew, our Head of Games, and ask him to get a new demo, he couldn't get me on time, so he shared a photo of him holding the batteries. I wanted more batteries in there. But the bottom line is that Magic Leap was really helpful. They've been really helpful in bringing this together. The same way that AWS was really useful in helping us scale up the previous innovation Magic Leap was really helpful on this one.

I think as we go into our learnings part, 1 thing which is probably very known to everyone, but I just want to reiterate is choosing these right partners is probably the most important thing. Right tools, we all understand are important, when you are going on a job. But knowing and choosing right partners can improvise the utilization of those tools exponentially. And our case Magical Leap won 1, AWS being another. They have been extremely helpful for us to go through and cut through different technology processes and you have a partner who is pushing through your problems. Our problem is providing value to our end customer, not necessarily solving for a bigger software ecosystem, while we have got partners, who can zoom out that application or use case and bring broader solutions to us to push through the technology so that in the end of our customers are more meaningful. But going into learnings, I'm going to steal a line from Jack Reacher, an investigation details matter. I'm going to fit that into engineering in the execution details matter. What does that mean? It's important to us because most of our engineering firms will know who do manufacturing, 3D models are not new. We have such a fine-tuned 3D models, where you can actually have a [ 116th ] of an inch of accuracy for the physical versus the virtual model, you can do all kind of injection molding and cases and everything you name about it. Fine. But when you take these experience on to physical devices to more virtual devices. Can you use the same models? Why not? They have the same kind of fidelity. Unfortunately, we learned very quickly, that's not possible because the fidelity that you have on execution models is around 2 to 3 GB at the best. And worse, if he were to be really engineers, they go in double-digit GBs. While edge devices are not yet capable of handling it, and they don't even have used cases associated with it. So the transition from execution to plan it was quite a bumpy one. It was a quick transition. We quickly realized that we have to shove down other details, but like I said, engineering and execution details matter. So that's definitely been 1 of our learnings that is streamlining our assets, if you were thinking of that journey as an engineering firm or as a manufacturing company or as a retailer, most of us have 3D model representation of our physical work. they are applicable, they're applicable, but they are not directly applicable. You need some transition. It is small, it's very quick, but you still need that transition.

And perhaps we didn't need the 2 gigs representation of the tool, maybe with 50 megabytes of a 3D asset, we were fine, right? So we're a little bit over time, I think with the back and forth. Just super quick. 3 things that we learned, make sure that you got the right assets in 3D, this is going to become more important from the production to actually the dashboard that you are showing your own car in your dashboard. You need the asset, don't try to replicate the experience that you got today in the physical world and don't try to be a game. I think a lot that went into metaverse was sometimes misuse of the technology, and there is real opportunities to creating a longer-lasting experience of you as a retailer with your clients being along the training and the exploration of projects.

And you're just thinking about this transition. I think 1 thing, again, to remember, and we're going to bring our results back to 10 to 15 years when the transition happened from physical manuals to digital channels. The customers are looking to solve their problem, but they are not looking for same experience. For an example, if you're searching a manual, they're not looking for a long list of alphabetically organized all the SKUs where they are going to scroll through your web page. That is where the industry has gone through. When we make this transition and as the industry pushes through this transition, we don't have to repeat that mistake again. We don't have to replicate what our customers see as digital experience into the virtual experience. As you are seeing, if you were to just make it a training use case or a safety use case or a security use case, this is going to replicate your digital journey. But if you think holistically zoom out what problems your customers are really trying to solve the opportunity for businesses to grow and our customers to get the value out of it is going to be exponential. And that's been our learning that bringing all of this together, which is fragmented in 1 place, easier, make faster and much better for everyone.

Thank you, Shobhit and thank you for letting us be part of your journey. Thanks, everybody, for joining today. Sorry that we're a little bit late because of the back and forth. If you have any questions, we'll stay around. Thank you for joining, and I hope you enjoy the rest of the show.

Thank you, everyone. We are happy to answer any questions if somebody have.

We have time for questions. Anybody?

I think we're good. Thank you very much for joining. Hope you guys have wonderful day. Thank you.

Thank you.