Q1 2022 Ci&T Inc Earnings Call
Speaker 1: Since the 1900, and ninety's companies have been trying to digitally transform their operations and how they interact with customers.
Speaker 2: The rapid expansion of technology, driven by the ubiquity of mobile applications and other connected devices, has increased the prevalence of connected consumers empowered by these technologies. Consumers are more sophisticated than ever and are increasingly demanding seamless digital experiencestheint is a global digital services specialists and have helped companies adapt to these new demand since 1995, quickly gaining a reputations for providing digital solution that delivered on both speed and quallogy. From a tumble beginning, ciint now providide strategy design and software engineering services to enable digital transformation for the world's leading brands.
Speaker 3: Ci T is a technology service company with a solid track record of continuous growth, best in class profitability and a highly recurring revenue model with a strong net revenue retention rate. Ci also operates with a very healthy employee retention figure. In the market of digital services, large enterprises and new, fast growing digital firms are facing challenges with digital transformation. The former struggle to innovate and quickly transform, while the latter struggle to scale their operations. To help these companies, CI combined digital strategy with customer centric design, top of the line software engineering to offer end to end solutions from the business opportunity to the hands of the consumers. Ci combined these compeidences under one set of principles, practices and methodoies called lean digital, a methodology unique to CI that is a combination of the disruption of digital and the discipline and leadership frame of mind of lean. Ci generates business impact for clients across several geographies and industries, such as financial services, food and.
Speaker 3: You D like to submit a question, please send it email to investors at cnt com.
Speaker 3: This event is being broadcast live and lead the access through the company's Investor Relations website at investors CN com, where the presentation is also available.
Speaker 3: The replay will be available shortly after the event is concluded.
Speaker 3: Some of the matters will discuss on this call, including our expected business outlook, are forward-looking statements and are such are subject to non and unknown risks and uncertainties including, but not limited to, those factors described in our earnings release and discuss in the risk factors section of our annual report on Form to act and other reports we may file from time to time with the SEC.
Speaker 3: This risks and uncertainties could cause actual results to differ materially from those expressed on this call. We caution you not to place and ue reliance on those forward-looking statements, because they are valid only as of the date when made.
Speaker 3: During this presentation we'll comment on certain non-IFRS financial measures to evaluate our business. Please refer to a reconciliation tables of non-IFRS measures in the appendix for more details.
Speaker 3: Our agenda for today includes an update on our financial highlights in recent events, followed by some of our successful business cases and a few highlights.
Speaker 3: We'll then talk about our people and ESG strategy and de timeive on our quarterly financial results.
Speaker 3: After the presentation, there will be a QA session. Now I am pleased to invite seigone to begin our presentation.
Speaker 4: Thanks Ed uarddo. Good day everyone and thank you for joining us today. We excited to initiate 2022 with a strong revenue growth in the firstth quarter, which demonstrate the resilience and consistency of our engagements with long-term clients.
Speaker 4: Digital transformation has been enabling companies to unlock its business potato, increasing sales and improving profitability.
Speaker 4: And demand for our services remain strong in all inus verticals we operate.
Speaker 4: We also have been disciplined to emboard new clients every quarter to guarantee sustainable, long-term growth and our high machine continues to operate at full speed. That said, let's dive into our Q1 main figures.
Speaker 4: Our natural revenue growth in the first quarter of 2022 was 66% year over year, or sevenventy 5% in constant currents. By the way, this is our to 20 third quarter of the consecutive natural revenue growththe main factors contributing to our higher growth base continueed to be the expansion of our engagements with existing clients, the addition of 16 new clients in our petualme, reaching 110 clients with annual revenue above one minute rise, and our parammatic MA strategy. We end the quarter with more than six point four thousand CI tiers. In that addition of two point seven thousand employees in the last 12 months, that's a seven 1% growth in our handcount. Once again, I want to express my gratitude to all CI tiers across the globe that have been dedicated to make this happen.
Speaker 4: ste we will keep dving our financial results shortly now. Let's take a look at three recent power stores, with new phase AI, any dus, the launch of our equp to powerhouse and some additional highlights.
Speaker 5: New vasive, a global leader in spine technology innovation, sought CI and T's help in improving its sales process in Japan, a key region for the company. New vasive partners with leading surgeons to transforms spine surgery support providers to advanced care and design an enhanced experience that changes patient lives. Depending on the case and addoctors preferences, surgical requirements can become complex and involve sales representatives and new vasive customer service teamci and T and new vasive collaborated to create a cross functional multicultural team with professionals from China, the United States and japana critical first step was to understand the journey of sales reps and customerswe used a human centric design to approach it in order to get a better understanding of the issues the group' face and map up their challenges. The result was a digital solution shaped by user needs which help with application adoption, drove immediate value for the end users' roles and could.
Speaker 6: Record and play the key role in the evolution of its. My Audi AP.
Speaker 6: A huge milestone in this journey has been the development of Audi premium charging experience for E owners, or PCE for short. Our brief was to build a solution empowering each tron customers to manage their charging experience through the myaudi app. This included customers enrolling in the TCE program charging their car as designated a charging station and viewing their energy credit balance and charging history. In partnership with Audi of America and its playing flawless product leadership, we delivered a fully working digital product in just eight weeks.
Speaker 6: Collaborating closely with Audi's global AP team, we overtain many technical challengesthe solution required complex API integration to add customized call to actions for Ed customers in America. Meanwhile, numerous back-end connections were set up to allow the myaudi app to communicate seamlessly with third party application. Our focus now is on scaling the product with new functionality. Currently in development is plug in charge, which enables drivers to begin a charging session by simply plugging the charger into their car. Customer engagement with PCE is thriving, with an impressive 78% enrollment rate and over eight thousand completed charging sessions to date.
Speaker 6: Solo and Audi of America continue to ennovate together to cemendber brands. steeders as a leader in a electric transformationeddo and education and technology leader has digital transformation as a key leader to growth. Its digital journey started in financial and administrative areas and the first core business digital initiative with see me and own solution that supports educational institutions in the digital learning strateges with content, platform and methodology promising first results motivated edducts to reach out to see andt to leverage the company's digital capabilities. Our partnership began with the mission to strengthen the work already started in digital education, with a strong loyalty to students and then engagement with online studies and to the agility in expanding the company's brand portfolio. eddo establish the foundation for its digital ecosystem.
Speaker 2: Through a collaborative effort between CI and tea and edox, we ran a strategic discovery, using best-in-class human-centric design to listen and learn from students, education institutions and professors. From there, we supported edox in developing its new platforms, using intentional architecture to foster the business- precisely the virtual classroom and the student app. Both initiatives are developed in an integrated roadmap with both backlog and system integration. With this distinctive approach, we can prioritize the most relevant features, working towards the same goal: to improve the student experience and enhance edox's capabilities to scale a single platform for its different educational brands.
Speaker 2: The project reduced complaints about accessing the content by 67% and increased access through the mobile up by 40%. Currently, the virtual classroom supports peaks of 133 thousand simultaneous accesses, allowing edox brands to have 75 thousand of its eight thousand students as active users, with daily stability.
Speaker 7: Importance of the technology and because if to the year with exceptitive sequation, MO say per by question, change idea, instrum. Another second conence when another ation re such financeci moment the back to D So instruments saw Form, it are to form, going present by the to noise that must been so F anciing com of the proance multiple, inferenrenically it is Thank you question, change the guard, change as with 100% of the students" S journey available online. This story is evidence of a vision where people from any part of a country, at any time or on any device, can access quality education easily and where leading companies like E dukes can count on CI, I and T to expand and materializes its strategies.
Speaker 1: Throughout the history of technology, there have been a few era defining moment that caused significant changes in businesses and industries around the world. The innovation around cryptocurrences, blockchain and web three sets the stage for such a moment. To help our clients drive in this new landscape, we have CI and T's crypto and web three powerhouse. We focus on helping our clients discover and expand the opportunities enabled by web three and blockchain by assembling a global deep expertise group. Additionally, helping to develop next-generation professionals who can contribute to integrating existing businesses and technologies into this new world. With CI and T's methods, we can help our clients test a hypotheses to find out how crypto and web three can be used in creating new business modelsopening new channels of engagement with their customers.
Speaker 2: Joining a new global market and repositioning their organization within a revised mindset of value, portability and composability. The powerhouse has enabled our financial services clients to explore new offerings connected to digital assets and F? I protocols. It has also enabled our consumer products clients to increase customer engagement through the issuance and management of nts and other types of smart contracts and finally, even our cryptoive clients to accelerate their growth with teams that understand this new set of technologies. Where three is a partam shift, it's disruping everything, from finance to our to collectles, to rewards, to gaming. A lot people to think it's all just to be the finance world, but actually it's spreading around many, many different verticals and industries and it's really like a few of change similar to the ones that we saw on the Internet was coming up in the mindety and, in fact's many analysis that showed that.
Speaker 8: We are at the moment with the adoption at the same stage, rock as we were Inter circular. So companies that don't have three strategy today risk being behind. We've seen an increased number of initiatives related to crypto and web threeree over the past year, driven by new business use case as well as different ways of engaging with consumers. Some analysts expect that more than 20% of enterprise will be integrating with web applications over the next two years and the challenges they will face are going to be very unique. At C and T, the crypto and we pre powerhouse allow us to accelerate the impact we can bring to our clients by combining the distributed knowledge and experience on this space with the development of our people in a new way. That allow us to help our clients in looking at the possibilities and having experienced within all the different types of techknowledlogies that are involved to make it happen.
Speaker 9: I cannot wait to see all the new ways that we'll be able to help our clients in unlocking new opportunities, as well as make that tomorrow.
Speaker 1: The last few months have been full of recognitions starting with the great place to work ranking for best. I companies to work. forci T was the third G P T W in the tech field in Brazil. We were also named a leader in application development and scaled agile and digital customer experience services for representing innovative strength and competitive stability. According to the definitions of the I's G information services group a leading global consulting in technology companymarket analyses future projections and inspections. By I's G's global consulting team were the basis of the report after completing a rigorous evaluation program marking the highest standards of technical delivery on theaquia platform. Ci T was honored to receive recognition as one of aquea's first certified practices. The program awards the certifications to organizations with the.
Speaker 2: With their consumers. The event elevated CI I and TE name recognition within the beauty and wellness category by showcasing our thought leadership. Guests included business leaders from interest Johnson, and Johnson sent bird IP C and more.
Speaker 2: In may, we launched our first ESG report. This initiative shows our journey and diversity inclusion, governance and environment. We are glad to have what to share and to be committed to a better world through increasing employment opportunities. As for highlights, we have a 40% of diversity representives globally, including women, Black people, people with disabilities and lgbtqa. Plus, following the UN sustainable development goals, we selected six main goals to pursue that have more sense related to our business model. You can find the complete report on our investors website, our esgp C N Dot comnow. I'm invite Bruno to talk about our people G strategies. Thanks ever. Good morning everyone. It's a pleure to be here with you again.
Speaker 3: We concluded first quarter of 2022 with more than 6400 se tiers, which represents a net addition of two point seven thousand employees in the last 12 months. In the first quarter alone, we on boarded around 400 trainees from the bestass Brazilian universities through next Jane, a program we have been running for more than two decades. In addition to that, we added around 300 people from smo, an acquisition we concluded a little January this year.
Speaker 3: So o has teams in the U? K the West in Colombia, diversifying our global footprint and expanding our presence in strategic regions such as the? U's. In Europe we will leverage so much Columbia footprint as a Beach had to further diversify our talent boo. And expanding Latin America. We are committing time and energy to promote a shantee brand as an employer of choice in the region. Our goal is to be one of the most attractive companies for digital talent in that geography. We believe it has a powerful competitive advantage because of its cultural alignment and time zone proximity with the? U's market, the biggest market worldwidetoday. I'd like to come in under working environment that we have created at guarantee, which gives us a competitive adge on the supply side.
Speaker 3: The sani coulture has been built by our people throughout our 27 years' history. It is generally strong and nurtured daily by our values, processes and actions. At the center is trust, which unites the elements of our culture and gives cohesion to what we believe and do, making it a joint construction. We foster autonomy and accountability, diversity and inclusion. We encourage our people to trail, blaze new paths and build new knowledge collectively, and we promote a continuous learning and development mentality.
Speaker 3: This great environment stems some processes and methodologists we have been hunting and streamlin for more than two decades. Sante is about people and we take this very seriously.
Speaker 3: Trust and care for each other enables everything we do markedly our incredible growth. That is only achievable by the continuous personal growth for each one of our team members. Our commitment to clients that is held by the chain of trustal relationships among our scientteers, and our amazing collaboration, which makes us one of the top places towork globally, is built on the respect and care we extend each other.
Speaker 3: Last week we published our first G report detailing our initiatives, results and ambitions on the environmental, social and governance front. This is a critical milestone for cint. Esg is part of our foundation and we are very proud of the work we've been doing. We continue to do. We con seeider our communities and society as a whole as one of the stakeholders. We work for the world. This from all of us and we're super excited to share how we're doing our part.
Speaker 3: Our SG strategy is driven by a vision to create equitable advancement opportunities for everyone, provide educational in-workforce development experiences for underrepresented groups and reduce our environmental impact to create a more sustainable future.
Speaker 3: In 2020, we reviewed how we organize internally around ESG to accelerate impact. We designed this new governors to include all involved agents.
Speaker 3: Action groups, ESG team, business units and human resources. Our ESG strategy is guided by a global ESG committee that has a direct participation of two our Board members.
Speaker 3: And here you have a few examples that show we ARM on the right track. Currently, 40% of all ciingtiers are part of at least one of our diversity groups and we expect to move steadily to higher levels of diversity inclusion as we move forward, taking advantage of our rapped growth.
Speaker 3: In the last four years our social initiatives positively impacted 22 thousand people throughout several projects, including partnerships with many ngls. Last year, we made an important step towards our sustainability strategy. We conducted the first inventory of greenhouse's gas emissions in our Brazilian operationsbased on this initial assessment will be able to monitor and set up targets to reduce and compensate for our emissions.
Speaker 3: I invite you to download and read our ESG report available the Investor Relations website and through the qy R qual to see in this presentation. Now I'd like to invite Stanley to comment on our financial performance. Stanley handed off to you. Thank eraru, and good morning everyone. Nice to be here again with you and let's dive into our first quarter of 2022 figures.
Speaker 10: We ended the quarter with a net revenue of 492 miner ISE, a 66% growth compareds to first quarter 21. our most recent position So contributed to 10 percentage points of our net revenue growth and the net revenue in constant currency greved 75% in the periodthis is strong performance, reflect our consistent net revenue retention rate. That represents the revenue expansion from existing clients combined with the addition of new loust. Every quarter. In first quarter 2022 we added 16 new loust that will fosteer the continuity of our growth in the coming years. Our adjusted develop was 86.1 minillion ISE, an increase of 26% over the same quarter last year. The EBITDA margin was 18% in the quarter, as planned.
Speaker 10: It's worth mentioning that we have a planned seasonal effect of our results in the fourth quarter, when we have the annual salary readjustments for employees in Brazil, while the price readjustments in our contracts occurs throughout the yeartherefore, by design, we usually have higher margins in the second half of the year. On the other hand, it's worth mentioning that seasonality in two point zero two two million and 21 were affected by the pandemic, changing the typical parts in our business. Another important factor is related to our general and administrative expenses.
Speaker 10: Naturally, with stepped up the level of our gna expenses in connection with our IPO and the compliance required as a public company. Most of these items are six expenses and will be diluted as we grew during the next quarter and years, provided us an operating leverage of our margins going forwardfinally, our adjusted net profit was 33.5 minai, a decrease of 16% compareds to first quarter. 21 due to higher financial expenses as we incurred new debt last year to finance de AX trxisition, as well as higher depreciation and amortization from MNA. These items were partially offset by lower income tax. Expenses based on the corporate reorganization conducted last year posed our IPO.
Speaker 10: Another important highlight in the quarter is our diversification in terms of geography, industry and revenue by clients. With the acquisition of smo, we now have 7% of our revenue coming from Europe , totalonly 52% of our revenue coming from matjure economies and 48% in attempt.
Speaker 10: Analyzing the performance of our industry verticals, TMT gained relevance and became our top three vertical, while we are also fostering new verticals such as retail, logistics and automotive, among others. Lastly, CNG reduced its top one client revenue share from 2- 24% in the fourth quarter 21 to 15% in fourth quarter and two and 22, while our top 10 client share decreased from 73% to 51% in the same period and we expect this trend to continue, based on our revenue growth for two thousand and 22 and the on Board of new rolesthe final comment on our growth engine: our net revenue retention rate for two thousand and 22 is pointing to be above the one hundred and twenty-eight percent of two thousand and 21, boosted by the expansion of our existing engagements. This is a key factor for us to review our net revenue guidance for the current year.
Speaker 10: Our go-to-market strategy, based on presenting our value proposition of delivering business impact in short cycles to new clients, have been fruit true, as you can see in the right-hand chart.
Speaker 10: In first quarter 2022, we successfully increased the number of clients with annual revenue above one miner eyes from 94 in Q4 21 to one hundred and Ten in this quarter. The number of clients with revenues above five miner eyes grew from 43 to 53 over the same period, building a solid cohort for the coming yearsi will now pass it back to caesar to conclude the presentation. Thank you for your attention. Always nice to be here with you, phasabase.
Speaker 4: Thank you stantly. We excited about the opportunities that lie ahad. Based on current market conditions and our existing engagements for the year, we are increasing our guidance for the full year of 2020: twowe expect our net revenue in the second quarter of 2020 two to be at least 53 million rise, a 68% growth compared to our net revenue of 315 million rise in the second quarter of Y 21. for the full year of 2020 two: we expect our net revenue to be at least two point three billion rerise, or $442 million, a 59% growth compared to our net revenue of one point four four billion rise in 2020 one.
Speaker 4: This guidance contemplates 11 months of sommo acquisition, concluding late January 2022, contributed to around 11 percentage points of the revenue growth in the year.
Speaker 4: In addition, we estimate our adjust EBITDA margin to be at least 20% for the full year of 2000 and twenty-twoe. This guidance assumes an average exchange rate of five point two Brazilian realrise to the? U's dollars for the full year.
Speaker 4: To summarize today, I would just recall that we have been expanding our growth bed in recent years based on a combination of three growth forces: a domain drieving, digital strategy as a core component of our offering our growth Unity business ature fosteringa scalable and temperary organization model. And a programmatic approach for a as an enduring new capability focused on a flow of selective and strategic acquisitionsdigital is a secular demand in a corporate world and C we continue to expand a grassually throughout this decade. We are designed for adapability, change and innovation, either for ourselves off our clients- such an essential thing in certain timesmaybe I would say for all timesthat's what we had today.
Speaker 4: Thank you all for addressing C and for atttaining your call today. We now conclude our presentation and we may now begin you in a session. Well, Thank you says. We'll now begin the question and answer session. Our announce each participance name: was your, he your name? Please mute your line and ask your question then, when you're, Please mute your line. First question comes from ashing, from CD bank ashing. You may proceed. Thank you and congratulations on the good, good growth and revenue numbers. I was hoping to you know. You provided obviously to.
Speaker 10: So ary payro, and exactly what happens for the year. We will have price adjustments in our contracts and naturally our margins will step up and in average we have 20% guidance that we are providing in every a for the year. In that, exactly as it is desquite to what we expect to happenbut understood. And then so that you refer to M N a as a programmatic approach to M N a, does this mean that, having completed the couple of acquisitions here, you are becoming more comfortable with with M N a as a regular contributor? And could you talk perhaps about the M N a pipelineand available valuations?
Speaker 4: R Thank you for your question. I think we are very excited with our mina strategy. I think that strren. So to very concrete examples that we can really speed up our organic growthadding capabilities. An especially reputation in new geographers in vert post and I think this this micro environment plays in favor of our our immin strategy and I see a strong pipeline. Basically I see to main perspective. That is there is improving one is I think the founders and we look carefully for very good. Found led companies. I think founders are more willing to discuss a deal or the transaction at this moment and also as you mention. I think there is.
Speaker 4: More space for pricing discussions in better terms. I think both, if you combine, I think, make us very confident that we will continue our strategy of combining our main source of value creation, that is, organic growth, with a very dramatic and, I would say, strong in a strategy.
Speaker 11: Got it, Thank youthank you. Thank you, asine. Our next question comes from punet, from JP morganok. Thanks for taking my question. Good question on demand, caesar. I heard like relatively encouraging comments on demand, environment and and what you are seeing in your business.
Speaker 12: How do we reconcile that where concerns around inflation, oil prices, macro concerns broadly how much visasibility you have on sustainability of this demand trends over next few quarters?
Speaker 4: Thank you for a great seal. Well, I think you could see demand for our services remains strong. I believe certain is the best soil for digital always strategies and for for CI value pro of combining strateggy design engineering, very pragmated way to generate results, concrete results- in very short, short time. I think I would like to highlight that 86% of our demand comes from large brick and Mortal traditional winning companies and only 14% of our demand comes from digital native a player. Looking also this profile give us part of the resilience we have in looking at and see the trends. If you look at the main verticals we are exposed to, financial services, I think the competition among traditional financial institutions and the thing that's continue to create a lot of demand for us. We are playing both sides.
Speaker 4: econom, environment and data. I think data across all the industry, advancecment- and it is my fuel Ning operations- are now, I would say, a core part of any, any strategy around digital, and I don't see companies really reducing investment around this, because this is the real future, the real way to stay relevant in the future. So I think this is this is again uncertain- is the best soil for for digital, and we are have to to be very well positioned.
Speaker 12: Now that's but you know and are't seeing any changes in client priorities or how they think about outsourcing to a certain region or any region are.
Speaker 12: After this, geopolitical issues in Eastern Europe : are you seeing any changes in howlines outsource and seeing maybe more coming towards Latin America as a result of thatyes, I think I think you're right. I think the geopolitative threats in Eastern Europe highlight how is stable is Latin America, how important is the region, the whole region, in terms of global sourcing of techct balents and, I think, for ciind. I think we are really the, I would say very, very competitive in the largest tech Tal, Latin America, that is Brazil, and also as minnoation we diverse, we are diverse, findine our strategy. So but at the end of the day, I think Latin America now on spot for global sourcing of back in digital and I think we can take advantion of that.
Speaker 13: Thank youthank. So next question comes from A. do logga for medo your MA seatgood morning everyone. Good morning, Congratulations on the results. I guess, on the back of the last question, say: what do you see sort of the life cycle of digital in your clients? What inning are we? And I ask this: when you walk into your clients and see their infrastructure, do you still find a lot of know, monolithic websites or legacy systems and so the plumbing that you guys are constructing? How much? How much room do you still see? How much? How far away do you see maybe traditional breakand more companies from implementing the necessary system architectures and design practices?
Speaker 14: To really be up to date with best in class sort of digital transformation journeys. Broad picture: are we still in the first, second inning or have you seen companies really make progress in the past years in terms of rolling out those system architectures? And I think the second one is more related to hiring. We saw an impressive number of new hires and I think there is sort of linearity between revenue growth and hiring. What is the pace you plan to keep that up? Should we think about an acceleration in hiring or maybe maintaining the current levels? Those will be my two questions.
Speaker 4: Thank you great to think for the questions. I would start with the first 1, and can help you with the second. I think, if digital is really digital, transformation is a long journey. We are seeing just, I would say, the beginning of this- really a combination of two main force is 1, maybe more visible, that is the technology, the growing number of technology possibilities that companies can use. The second trend: consumer behavior. The society is changing in such a speed that companies need to react all the time to that. That put a lot of pressure on, really take advantage of the new technology possibility and try to catch with what's happened with your customer, with your consumers and in terms of, I would say, the curve of technology adoption. It's, it's we.
Speaker 4: We see a part of the challenes- maybe the most visible parties migrate to the cloud established digital cchure and process and practice that we allow you to really play digital in the right way. But there, this is one of the redesigns traditionital companies need to face. But there is two more very important redesigns. one is the management system. Companies need to operate with a completed different set of management practice, budget practicice, reporting practices. The way they operate need to adapt to the digital center. And finally, there is the leadership challenges. Companies also need to evolve in their leadership, the valent practicice, So they know that they migrate from less centaryy commandment control to the digital leadership, collaborative coocreation, everything that we create or foster.
Speaker 4: Talent to really be problevms of at kcal. I think if you combine these three major chall or three major redesigns, that's why we see more than a decade of the investments around this translation of traditional winners of the 20 century to be important and relevant in protagonist in the twenty-first center. And now I think Brun could help you with the people and headcount question, brno.
Speaker 15: I think you are muteallright guys, classic pandemic mistake. So thank you for the question. Our to yes, you can expect the people grow to follow revenue right. So it's a very linear relation there we do have. On the Q1 it's especially bigger because we on board usually our traineing program, as I mentioned, is a kind of a very common thing we do. If you remember, our strategy is to grow our own people, to develop our own people, So we kind of not not focus on the, on the senior, the senor level, So we kind of a invest on junor to medid level and grow this, those people, our vadue proxy for people. As to, we grow faster than the industry.
Speaker 3: Which means we prommoote them within and we will grow faster your careeryear here than in anywhere else. So that's a very strong Val of proposition that works and's being working for many years. And it's very compelling for attack people that went to the develo of themselves. They wanted to get you know new things and always be learning new things. So it's a very compelling our tract indicator, like the number of proposals, except that it's very high. It's close to 80%. So even it's a very competitive market. We continue to be very, very competitive. Compelling message: right again: you one is a little higher because the boarding the trineses, but the rest of the year can. You can see a very linear relation between revenue and people. Perfect time. I maybe just never know. With respect to the highres, during the quarter they start revenue, generating revenue in approximately how much time sinceend hiring? I mean maybe. In other words is, whereas your overall utilization rate right now, due to the strong hiring, just a?
Speaker 14: A little bit below average and should we expect that to go up? That's that's, I think, as stanally pointed up before, A. So that has to do with the seasonality as well way. So N board for them 400 traines. They would take four to six months to become available. So they will be training a lot of a lot of training, a lot of own job training, be already on the teams, but it would not be ailable to four to six months. When we are like a mid level. It takes. It takes kind of one to two in senior to probably. It's almost right away beailable, right. So that that's the the difference there, in that we will see margins growing up, growing up over as we go to billing. So that's the factor.
Speaker 14: Now MA sense. Thanks so much for for the answers and congratulations, Thank you. Thank you, thanks. The next question comes from meet them from good SES. Please go aheadwith morning everyone. And thanks for basking our questions. Your questions from us. The first, this is: your could give us some more color on how the early stages of D rates of So are going in and how the show contactxt with their clients are going. And our second question would be how you believe your guidance for margins could change if the? U us dollar exchange rate remains at lower liabbels, maybe closer the current lil of five eyes rather than the five lanches you will be the guidance if that could be rethervthan changed. Thank you.
Speaker 16: wellagain start with some question. I think of course there is a very low hang fruit on presenting the scale and global wide set of capabilities of ciind to the currening portfolio of so- and we are read doing that- we are starting to really operate with their customer in different geographers and with different capabilities and of course there is also the opportunity- I would say more mid to long-term opportunity- of leverage their vertical expertise. So it very specialize on the auto and utility industries, especially in U K, and we can leverage this vertical expertise in other regions we are operating. So I think so far we see this really working very well. I think we could see some continue to support really.
Speaker 4: Deliver the excellent quality of sources, do provide for the customent and also now have the global opportunity participate in the CI platform to ity speed up growth in terms of the range of servicces in the T available. The second question I think still we can can address that rightate. Yes, with regard to to margins going forward because of effects as, as you came remember, our guidance is based on five point Q effects going forward and a good proxy for you to to understand the dynamics is for each point cent in the exchange rate age viation, we we will see one percentage point of variation in our eighta. So this good.
Speaker 17: The reference for you to understand the information going forward N clear think about. Thank you, vtor. Our next question comes from Jason, from Bank of America. Jason, Please no my dturn to say you're probably a new Jason.
Speaker 18: Jason europethat is open.
Speaker 16: Had happson and we should hear your Fish out, ddo.
Speaker 3: So we do have some some questions from e-mail, which we covered most of them so that made one year that we cesee from one investors when investorter in terms of geographic diversification, which region is growing faster and where do you see more opportunities- not awards- where we expect a revenue breakdown to being the next three to five yearsso that we want to comment out that I can can comement on that. I think now we have adjacason. Well basically, we are organically. We see, of course, our main source of growing coming from the U SA, the largest market for digital and where we are very positioning. And also we see now Europe with a very good trends, especially now that after we acquire some more, and so we see also a lot of demand coming from Europe in the followall year. So basically, what you should expect is, as now we are forecasting.
Speaker 4: And in this year, with 56% of our revenue comits from the developed countries or hard currents. So, and this will gradually increase as we are ING faster in these regions. So now we have Jason.
Speaker 3: Yeah pleason't, Please go ahead. You can hear you.
Speaker 16: earliera bike issuewe can see you, but we can hear a.
Speaker 19: That yes, working on a different machine than usually. I want to ask about coming back on the wage inflation point. You guys expect to be able to pass 100% of the wage inflation on to your customers during the course of the year. And then can you also just comment on voluntary employee atrition in the quarter and how that trended versus the prior quarter?
Speaker 11: Take that one sold, So that wage inflation to point out, it's not an issue. It's a issue for Brazil operations right which fortunately, or unfortunately, it's a ready part of the culture it. It's ready regulated by contracts and so it's only issuesue for developed markets.
Speaker 3: Yes we do expect to over the year to pass that along. So we still see, as caesar mentioned before, like it's a very strong market in terms of demand and the shortage of supply. So that creates a lot of elasticity for companies like Shane. So, and we are a very privileged position- does the specialist in this market to kind of capture that value? So yes, we ll have some, some seasonality. So this is happening now and- and it's an uncommon public conversation with clients, but that's going to happen, it's happening everywhere in the industry and that's going to pass on to the prices.
Speaker 15: Your second question, Tor guarding attrition. Attrition is a little higher than our historical levels but still in a very healthy place, is 16%. Most of the bump there a little more competitive market and M a it's the or more and act I had a little higher nattrition, So the kind of a add up to the historic 12 to percent attritional centane. But we're still very comfortable there, are very, very confident that the most important attrition number that we look at is actually leadership attrition and that numberbers on the 4%. So that's very important because that's that's our ability to remain projecting very solid growth, our leadership in all level that actually guarantee the quality of our delivery and ability to continue to grow and develop power on people. So that's, that's a very, it's a very solid number- 4%. So when we trust now ability to maintain that healthy retention rate.
Speaker 3: The quintid to provide a very compelling value proposition to our people. maybeme just one quick follow-up just on the revenue guidance raise for the year. Would there be one or two call outs there that are primarily driving that either? My vertical by geography, just curious where the main source of the upside is coming from.
Speaker 20: Ican get this one I think that the main verticals for us, the growth is happening, financial sources retail, TMT and consumer goods, basically I think, are the major source of growth for us and as, as I explain, think digital is, from the Mano, source of competitiveness and and growth in this verticalsi again.
Speaker 3: So mostly demand coming from our traditional companies. It's the brick-and-mortar cluster there that's kind of really driving the growth. Yes perfectly, Bruno. I think just we mentioned we are operatedor. We have very high mattal recommitation. Last year was 1, 28% and this year will be even higher. I think this demonstrates how solid is our portf of customers and our mains source of growth. I apprehate.
Speaker 3: Big we have a follow-up question: from to do, from to do aheadyes, Thank you. I thank you for the follow. I think just on the back of the question regarding hiring, I saw some expansion to other Latin countries. I think Colombia stood out just to think about expansion from a headaccome perspective to other countries in the region. Where should we think about that? Maybe in one to two years, looking forward in MS terms of percentage right, what do you expect to be in terms of headcount diversification within the region? That would be useful, Thank you.
Speaker 15: Thank we. The question are TR. So you can think of a gradual diversification towards other countries in Latin America that are not Brazil, right? So we of course we're not kind of a trying to run away from our leadership position in Brazil. Brazil continue to grow strong. But we will diversify. Colombia: it's a great addition, right So it's a great Beach, had we got from the's acposition and then now we're going to average to make it way bigger to support overall scientific business us, and that's going to happen with other great sources of talent in Latin America. So we can see that diversification happily gradually, in stadily, in the next 2, 35 yearsnow. Perfect, Thank you. Thank you for your question.
Speaker 3: All right, So that concludes our QA session. Thank you all. Any your event today. I would now like to invite sala to proceed with his closing remarks. Sat AB, Please thankks.
Speaker 4: Thanks that Addo stanlea, bruno- for joining me today. Thank you all for participating in our call. As you note that demanda for our service remains strong and we are very confident we will have another strong year again. I want to thank all CI tears clients, investors and partners for their continued support and, of course, I'm looking forward to see all in a couple of months.
Speaker 16: Thank you all, but you Thank do ledch.