Q4 2023 CI&T Inc Earnings Call
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Unnamed Speaker: Technology is more than a device, system, or industry. Technology is built by people for people.
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Technology is built by people for people.
Unnamed Speaker: It's built for people with desires, needs, and ambitions by our people, who are talented, curious, creative, and diverse. Our people use innovative strategy, design, and engineering to offer end-to-end solutions that help companies to quickly transform and scale their operations globally. While we create AI-powered solutions, all we really want, and what motivates us, is to make their tomorrow, with a brief and few tags. Good morning.
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Good morning, welcome to <unk> earnings call for the fourth quarter of 2023, I am Eduardo go wrong head of Investor Relations at <unk>, and it's a pleasure to be here to talk about our operating and financial results with me on today's call are SaaS are gone.
Eduardo Galvao: Welcome to the Ci&T earnings call for the fourth quarter of 2023. I am Eduardo Galvao, Head of Investment Relations at Ci&T, and it's a pleasure to be here to talk about our operating and financial results. With me on today's call are Cesar Gon, founder and CEO, Bruno Guicardi, founder and president of North America in Europe, and Stanley Rodrigues, our CFO. This event is being recorded, and all participants will be in a listen-only mode during the company's presentation.
<unk> and CEO, Bruno <unk>, founder and President for North America, and Europe instantly Hu <unk> our CFO.
This event is being recorded and all participants will be in a listen only mode. During the companys presentation. After that there'll be a question and answer session for analysts and investors if you'd like to submit a question. Please send it via E mail to investors at <unk> Dot com the presentation.
Eduardo Galvao: After that, there will be a question and answer session for analysts and investors. If you'd like to submit a question, please send it via email to investors@cint.com. The presentation is available on the company's investor relations website, and the replay will be available shortly after the event is concluded. Some of the matters we'll discuss on this call, including our expected business outlook, are forward-looking statements and, as such, are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those expressed on this call. We caution you not to place undue reliance on these forward-looking statements because they're valid only as of the date when made. During this presentation, we'll comment on certain non-IFRS financial measures to evaluate our business.
<unk> is available on the company's Investor Relations website, and the replay will be available shortly after the event is concluded.
Some of the matters, we'll discuss on this call, including our expected business outlook are forward looking statements and as such are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those expressed on this call. We caution you not to place undue reliance on these forward looking.
Statements because they are valid only as of the date when made during this presentation, we will comment on certain non <unk> financial measures to evaluate our business. Please refer to the non <unk> measures disclaimer for more details.
Eduardo Galvao: Please refer to the non-IFRS measures disclaimer for more details. Today, we announce that we will restate our financial statements for the year ended December 31, 2022, as we identified certain non-cash accounting errors related to deferred income tax liabilities associated with the tax benefit on goodwill. The corrective adjustments are non-cash in nature, will not increase the amount of income tax to be paid in the future, and are not expected to impact net revenue or profit before income tax.
Today, we announced that we will restate our financial statements for the year ended December 31, 2022, as we identified certain noncash accounting errors related to deferred income tax liabilities associated with the tax benefit on goodwill. The corrective adjustments are noncash in nature, we will not increase.
The amount of income tax to be paid in the future and are not expected to impact net revenue or profit before income tax while we expect that our results will be consistent with this preliminary and unaudited estimates our actual results may differ materially from those preliminary estimates.
Cesar Nivaldo Gon: While we expect that our results will be consistent with these preliminary and unaudited estimates, our actual results may differ materially from those preliminary estimates. Our agenda for today includes an update on our quarterly highlights, followed by some of our business cases. We'll then talk about our people and our quarterly financial results. Now, I invite Cesar Gon to begin our presentation. Cesar, please.
Our agenda for today includes an update on our quarterly highlights followed by some of our business cases, we will then talk about our people and our quarterly financial results.
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Cesar Nivaldo Gon: Thank you, Eduardo, and good day, everyone. It's great to be here again to talk about the results for 2023 and our business outlook for 2024. The past year presented us with a series of short-term challenges due to the economic landscape, combined with the extraordinary opportunity to position Ci&T as a co-author of the next chapter in the digital revolution, powered by artificial intelligence. As we navigate through this challenging year, we focused on the reinvention of Ci&T by partnering with our clients and launching Ci&T Flow, our AI platform for hyper-digital. As founder and CEO, my mission is This vision is reflected in our team's exceptional dedication, creativity, and resilience, showcasing our strength and adaptability more than ever. Now looking forward, technological advancement has opened up the realm of new possibilities for businesses to enhance productivity and establish a competitive edge in an increasingly disruptive landscape. My experience with large companies has shown me that the speed of change is directly linked to the speed of learning, both at the personal and corporate level.
Thank you Eduardo and good day, everyone. It's great to be here again to talk about their results for 2023, and our business outlook for 2024 best of year presented us with a series of short term challenges due to the economic landscape combined with the extraordinary opportunity to.
Positioning <unk> as a co author of the next chapter and the digital Revolution powered by artificial intelligence.
As we navigate through this challenging year, we focused on the renovation of <unk> by partnering with our clients and launching CRT D flow, our AI platform for hybrid digital.
The founder and CEO My mission is to accelerate their path to value creation with a strong commitment to the long term. This vision is reflected in their teens exceptional dedication creativity and resilience showcase your strength and adaptability more than ever.
Now looking forward technological advancements have opened up the ramp of new possibilities for our business to enhance productivity and establish a competitive edge in an increasingly disruptive landscape my experience with large companies has shown me that the speed of change is directly mean.
To the speed of learning, both personal and corporate levels.
Cesar Nivaldo Gon: To drive innovation, companies must focus on understanding the intersection of new technological possibilities and evolving consumer behavior. The real disruption comes from leveraging both forces at the same time, as seen with the current adoption of AI technology. To accelerate change, companies must prioritize learning about AI capabilities and consumer behaviors in an AI-powered world. The key challenge lies in increasing the speed of corporate learning. That's the inspiration for this AI artwork based on Raphael's masterpiece, The School of Athens, symbolizing the spirit of the Renaissance and the pursuit of knowledge.
To drive innovation companies must focus on understanding the intersection of new technological possibilities and evolving consumer behaviors.
Rio disruption coming from leveraging both forces at the same time as seen with the current adoption of AI technology to.
Accelerates change companies must prioritize learning about AI capabilities.
And consumer behaviors in the AI powered world.
The key challenges lies in increasing the speed of corporate learning.
That's things duration of these AI artwork based on Rockford House masterpiece, the school of Athens, symbolizing the spirit of the hint of source and the pursuit of knowledge by the way I invite you to take a look at my coloring the future of AI Sears Linkoping.
Cesar Nivaldo Gon: By the way, I invite you to take a look at my Coloring the Future of AI series on LinkedIn. Moving now to our financial and operating performance in 2020, our net revenue totaled 2.2 billion Reais, a 4.1% growth at constant current compared to 2022 within our guidance range.
Moving now to our financial and operating performance in 2023.
Our natural revenue totaled $2 2 billion Reais, a four point to 1% growth at constant currency compared to 2022 within our guidance range, we have strengthened our relationship with existing clients expanding the number of clients generating more than 10 and 20.
Cesar Nivaldo Gon: We have strengthened our relationship with existing clients, expanding the number of clients generating more than R10 and R20 million in revenue from R38 in 2022 to R50 in 2023. We ended 2023 with an adjusted EBITDA margin of 19.3, slightly better than in 2022, as a result of our diligence costs and expense management efforts, towards the spirit of lower growth. Finally, in 2023, we generated R$414 million from our operating activities, a solid figure that underscores the resilience and strength of our business. Ci&T has a notable track record of consistent revenue growth, profitability, and robust cash generation. For instance, in the past years from 2019 to 2023, our revenue compound annual growth rate was a strong 35%. However, over this period, our revenue distribution has shifted.
<unk> revenue from 38 in 2020 due to 50 in 2020.
We ended 2023 with an adjusted EBITDA margin of 19, 3%.
Isolate better than in 2022, as a result of our diligence cost and expense management efforts throughout this period of lower growth. Finally in 2023, we generated 414 million reais from our operating activities a solid figure that underscores that.
Our resilience and strength of our business model <unk> is a notable track record of consistent revenue growth profitability and robust cash generation for instance in the past years from 2019 to 2023, our revenue compound annual growth rate was strong.
35%.
Over this period, our revenue distribution has shifted with nearly 60% of our revenue now coming from mature economies, primarily in the U S. This trend is expected to continue given the faster organic growth in these regions.
Cesar Nivaldo Gon: With nearly 60% of our revenue now coming from mature economies, primarily in the US, this trend is expected to continue, given the faster organic growth in this region. Furthermore, a significant improvement was seen in the share of revenue from our top 10 clients; it decreased from 67% in 2020 to below 40% in 2023.
Furthermore, a significant improvement was seen the share of revenue from our top 10 clients. It decreased from 67% in 2020 to below 40% in 2023.
Cesar Nivaldo Gon: We are confident in our ability to sustain our growth trajectory by delivering innovation and impactful results for our long-term plan. Stanley will provide more details on our financial performance chart. Now, let's explore some client engagements and business highlights for the quarter. Ci&T is proud to announce a new strategic partnership with Domino's Pizza, the world's largest pizza company and an icon among global restaurant brands, a digital innovator, and a prominent leader in the quick service restaurant industry.
We are confident in our ability to sustain our growth trajectory by delivering innovation and impactful results for our long term clients Sterling, we will provide more details on our financial performance shortly.
Now, let's explore some client engagement and business highlights for the quarter.
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<unk> is proud to announce a new strategic partnership with Domino's Pizza, the world's largest pizza company and an icon among global restaurant brands, a digital innovator and prominent leader in the quick service restaurant industry Dominoes draws on decades of tech expertise to consistently offer exceptional customer experiences.
Cesar Nivaldo Gon: Domino's draws on decades of tech expertise to consistently offer exceptional customer experiences. Ci&T and Domino's have joined forces to lead the way in pioneering a next-generation digital ecosystem, sharing the goal of elevating an already thriving e-commerce landscape. United by a shared passion for commitment and pushing boundaries, the partnership aims to build upon Domino's digital sales technologies. The collective effort will help provide a more streamlined path toward novel consumer experiences, once again positioning Domino's ahead of market standards.
And Domino's have joined forces to lead the way in pioneering a next generation digital ecosystem sharing the goal of elevating and already thriving ecommerce landscape.
And I did buy a shared passion for commitment and pushing boundaries. The partnership aims to build upon Domino's digital sales technologies. The collective effort will help provide a more streamlined path toward novel consumer experiences. Once again positioning Domino's ahead of market standards working with Domino's reflects our shared commitment to pushing technological bond.
Cesar Nivaldo Gon: Working with Domino's reflects our shared commitment to pushing technological boundaries. Our focus is on elevating Domino's already quite successful digital ecosystem and empower them to lead the market with unprecedented speed and innovation in customer experiences and e-commerce. Join us on this journey, where strategic collaboration creates innovative pathways, delivering even more enhanced experiences for pizza lovers. www.circlelineartschool.com. In a groundbreaking collaboration, Ci&T led the design of a pilot mobile application aimed at transforming emergency response through inclusive design and AI technology. This initiative united four organizations with the shared goal of revolutionizing emergency response systems. The principal challenge faced by the project was to improve the accessibility of the VEIC emergency app, ensuring its effectiveness for diverse communities.
Our focus is on elevating gardens already quite successful digital ecosystem to empower them to lead the market.
Pearsons speed innovation and customer experiences and e-commerce join us on this journey, where strategic collaboration creates innovative pathways delivering even more enhanced experiences for pizza lovers.
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In a groundbreaking collaborations C R and T led the design of a pilot mobile application aimed at transforming emergency response through inclusive design and technology. These initiatives United for organizations with the shared Gulf of Revolutionizing Emergency response system.
Principal challenge confronted by the project was to improve the accessibility of the week emergencies.
Ensuring its effectiveness for diverse communities.
Cesar Nivaldo Gon: The project's overarching goal was to extend the reach of emergency services, acknowledging a diverse population composition with 30% born overseas, 27% conversing in languages other than English, and 17% living with a disability. Ci&T collaborated with 2ME to develop an AI language solution that combines AI and human services for real-time translations. This ensured accuracy and quality control in delivering critical information. Additionally, insights from extensive user research guided inclusive design decisions, making the app usable for diverse demographic groups. The collaborative efforts on VicEmergencyApp have resulted in a pioneering solution that sets a global standard for digital accessibility in emergency response. By combining AI technology with design excellence, the project not only meets the immediate needs of Victoria but showcases the transformative power of inclusive design in building trust, fostering cooperation, and demonstrating the potential to save lives through innovative and accessible solutions. For more UN videos, visit www.un.org. Welcome to our latest update.
The project's overarching goal was to extend the reach of emergency services acknowledging a diverse population competition with 30% bone overseas <unk>.
7% conversing in languages other than English and 17% living with a disability.
And Keith collaborated with <unk> to develop an AI language solution that combines AI and human services for real time translation.
This ensured accuracy and quality control in delivering critical information.
Insights from extensive user research guarded inclusive design decisions, making the app usable for diverse demographic groups the.
The collaborative efforts on Vic emergency App have resulted in a pioneering solutions that sets a global standard for digital accessibility and emergency response by combining our technology with design excellence the project not only meet the immediate needs of Victoria, but showcases the transformative power of inclusive design and building trust.
Fostering cooperation and demonstrating the potential to save lives through innovative and accessible solutions.
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Welcome to our latest update we have gathered the most recent information and insights from our leadership team to share with you.
Cesar Nivaldo Gon: We have gathered the most recent information and insights from our leadership team to share with you. This is Ci&T's Global ESG Report for 2023. In it, we demonstrate how we uphold our Make Their Tomorrow motto by practicing sustainability, environmental responsibility, and respect for society and our people while operating ethically. For sustainability, we are proud to have neutralized our carbon emissions in all our operations this year. Due to our work towards Net Zero, the Brazilian GHG Protocol Program awarded us the Golden Seal of Quality.
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This is <unk> global ESG report for 2023.
In it we demonstrate how we uphold our make their tomorrow motto by practicing sustainability environmental responsibility and respect for society and our people while operating ethically.
For sustainability, we are proud to have neutralized, our carbon emissions and all our operations this year.
Due to our work towards net zero, the Brazilian Ghd protocol program awarded us the Golden seal of quality.
Cesar Nivaldo Gon: For people, we've achieved a significant milestone in our organization by having more than 50% of workers from underrepresented groups, including women, people with disabilities, and black and LGBTQIA PN plus people. Also, we are committed to creating a supportive and autonomous workplace. Our latest career development program has been successful in providing flexibility and fluidity and connecting career aspirations for 94% of our employees. On the society portion, we're thrilled to have positively impacted 21,000 individuals through our sponsored programs. In the governance segment, we're proud to report that 100% of our people have completed our Code of Conduct training.
For people, we've achieved a significant milestone in our organization by having more than 50% of workers from underrepresented groups, including women and people with disabilities, and black and LGBTQ I E. P M plus people.
Also we are committed to creating a supportive and autonomous workplace. Our latest career development program has been successful in providing flexibility and fluidity and connecting career aspirations for 94% of our employees.
In this society portion, we're thrilled to have positively impacted 21000 individuals through our sponsored programs.
In the governance segment, we're proud to report that 100% of our people completed our code of conduct training. Additionally.
Cesar Nivaldo Gon: Additionally, we've attained new security and data protection certifications. Finally, we are pleased to deliver value for our clients through ESG-based digital solutions that incorporate responsible principles into their business strategies. As an award-winning company in digital services, we are backed by a robust ESG powerhouse, enabling us to deliver impactful social and environmental projects. To read our report, please visit our website.
Additionally, we've attained new security and data protection certification.
Finally, we are pleased to deliver value for our clients to ESG based digital solution, incorporating responsible principles into their business strategies.
As an award winning company in digital services, we are backed by a robust ESG powerhouse, enabling us to deliver impactful social and environmental projects.
To read a report please visit our website.
Cesar Nivaldo Gon: We're excited to share that Ci&T has been recognized in the 2023 Gartner Magic Quadrant for Custom Software Development Services, a worldwide report. This prestigious research report evaluates providers' capabilities in custom software development to support digital transformations and build new products. It is based on rigorous criteria such as vision, strategy, innovation, customer feedback, and market presence.
Yeah.
We're excited to share that C. I N T has been recognized in the 2023 Gartner Magic quadrant for custom software development services a worldwide reported this.
This prestigious research report evaluates providers capabilities in custom software development to support digital transformation and build new products. It is based on rigorous criteria such as vision strategy innovation customer feedback and market presence.
Cesar Nivaldo Gon: Being recognized in the reports is an honor and a testament to our unique approach to digital products, which helps enterprises continuously advance their software delivery capabilities, creating value at the speed of need. We are also committed to developing transformational solutions through significant investments in AI and software engineering with the launch of Ci&T Flow. We believe that this recognition further validates our position as a trusted partner for businesses that want to propel forward in the digital world. We thank our clients who trust us with their most challenging and strategic projects. www.cindylaw.com Ci&T UK launched Accelerating Digital Efficiency with the AI Multiplier, a report in collaboration with the Global CXO Institute. The report examines European enterprises' complex and evolving digital landscape and reveals the challenges and opportunities they face in achieving their goals.
Being recognized in the report is an honor and a testament to our unique approach to digital products, which helps enterprises continuously advance their software delivery capabilities, creating value at the speed of need.
We are also committed to developing transformational solutions through significant investments in AI and software engineering with the launch of C. I N T flow.
We believe that this recognition further validates our position as a trusted partner for businesses that want to propel forward in the digital world. We thank our clients, who trust us with their most challenging and strategic projects.
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C I N T U K launched accelerating digital efficiency with the AI multiplier are reporting collaboration with the global <unk> Institute.
The report examines European enterprises complex and evolving digital landscape and reveals the challenges and opportunities they face in achieving their goals.
Cesar Nivaldo Gon: The report is based on a survey and interview with 100 digital business leaders from various sectors. Findings show that despite increasing technology budgets, with 59% of organizations reporting budget increases in 2023 and a further rise expected in 2024, many businesses are still struggling to meet their digital transformation targets. The report identifies the key areas where businesses are prioritizing efficiency in their technology operations, such as IT and data strategies, data management, customer operations and service platforms, cybersecurity, and e-commerce and payment platforms. If you want to learn more about the report and how generative AI can help companies accelerate their digital efficiency, you can download a copy at our website. Our podcast is now Humans of Digital. In this new editorial segment, we will uncover how to decode the new world of humans in a digital native world. AI is undeniably a revolution in our area in terms of technology. It's 100% globally relevant content. What is AI?
The report is based on a survey and interview with 100 digital business leaders from various sectors.
Findings show that despite increasing technology budgets with 59% of organizations reporting budget increases in 2023 and a further rise expected in 2020 for many businesses are still struggling to meet that digital transformation targets.
The report identifies the key areas, where businesses are prioritizing efficiency and that technology operations, such as I T and data strategies data management customer operations and service platforms, cyber security and e-commerce and payment platforms.
If you want to learn more about the report and how generative AI can help companies accelerate their digital efficiency you can download a copy at our website.
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C. I N T podcast is now humans of digital.
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In this new editorial segment, we will uncover how to decode the new world of humans and a digital native world.
<unk> is undeniably a revolution in our area in terms of technology, it's 100% global relevant content why didn't they otherwise.
Cesar Nivaldo Gon: Why is the United States AI? So this vocabulary is very important. Revolution is not just, you know, one big stat, one super bullet.
Capillary standpoint, and resolutions by Jos.
One big stack was Super Bowl.
Turning that youre going to face all the product available on your favorite platform.
Cesar Nivaldo Gon: It's a journey where you're going to face all the problems. Available on your favorite platform. This is our latest news. Our aim is to continue providing transparent and relevant information to keep you informed and up to date on our latest developments and achievements. www.circlelineartschool.com CI&T Flow is advancing its beta version, reaching new clients in the era of AI-human collaboration. By gathering new users, Flow becomes a stronger ecosystem exclusive to our people and current customers. 9 out of 10 of our most significant clients are currently utilizing Flow.
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This is our latest news our aim is to continue providing transparent and relevant information to keep you informed and up to date on our latest developments and achievements.
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<unk> is advancing its beta version, reaching new clients in the era of AI human collaborations by gathering new users flow becomes a stronger ecosystem exclusive to our people and current customers.
Nine out of 10 of our most significant clients are currently utilizing flow.
Cesar Nivaldo Gon: All these major brands are exploring the potential of Gen AI and software development through comprehensive AI use cases. Our offers are also evolving to be powered by flow and an AI-first approach. The Data and AI, the Digital Strategy Orchestration, AI Legacy Optimization, and the AI Roadmap offer examples of this transformative era of our business. In this way, we strive to set our clients at the forefront of AI innovation, together. Amazon Web Services, AWS, is the world's leading cloud computing platform that offers a wide range of services and tools for developers and enterprises, and Microsoft and AWS have been working together since 2010 to deliver cutting-edge services for cloud migration, legacy optimization, customer experience, data AI and machine learning, and digital products.
All of these major brands are exploring the potential of Gen AI and software development through comprehensive AI use cases. Our offers are also evolving to be powered by flow in an AI first approach.
The data and AI, the digital strategy orchestration AI legacy optimization and the AI roadmap offer examples of this transformative era of our business.
In this way we pursue to set our clients at the forefront of AI innovation together.
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Amazon Web services AWS is the world's leading cloud computing platform that offers a wide range of services and tools for developers and enterprises.
C I N T and Amazon Web services have been working together since 2010 to deliver cutting edge services of cloud migration legacy optimization customer experience data AI and machine learning and digital products in.
Cesar Nivaldo Gon: In 2023, we received the Rising Star Partner of the Year, LATAM, from AWS for our outstanding performance and growth in their cloud market, demonstrating our solid and prosperous relationship. We have also collaborated on projects with leading brands such as Uduce, Bankopan, and C6Bank. These projects showcase how Ci&T and Amazon Web Services can help clients transform their businesses, improve customer satisfaction, and leverage the power of data and the cloud. Because the engagement on both sides was continuous, we are increasingly able to grow more. The company, Ci&T, within AWS is increasingly gaining more representativeness. In 2024, we will continue fostering business together, unlocking new opportunities, and driving shared growth in project revenue. Hello, I'm Micaeri, and I'm the AI Machine Learning Leader at C&T.
In 2023, we received the rising star partner of the year laying them from a WNS for our outstanding performance and growth in their cloud market, demonstrating our solid and prosperous relationship. We have also collaborated on projects with leading brands such as you'd use Banco Pan and see six bank. These projects showcase.
How C I N T and Amazon Web services can help clients transform their businesses improve customer satisfaction and leverage the power of data and cloud.
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Randomized if anything that should be died in 'twenty 'twenty four we will continue fostering business together unlocking new opportunities and driving shared growth in project revenue.
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Cesar Nivaldo Gon: My role centers on overseeing the development and implementation of cutting-edge data and AI technologies, ensuring they are integrated ethically and efficiently. My focus is on not only identifying emerging technologies but also crafting the propositions we have for clients. Well, entering the AI career was challenging for me, especially when I was told that I would only learn AI if I left Brazil. However, I was determined to prove that it was possible to excel in the field without having to leave my home country.
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Fantastic overseeing the development and some addition of cutting edge data.
Technology is ensuring they are integrated ethylene and.
My first one is on not only missed by immersion technology, but also fascinating senior positions in the eyes of our clients well.
Well Anthony I career, it was challenging.
Especially when I was told that I would only learn AI, if I left Brazil, However, I want to ask Jeremy to barrels that it was possible.
Without having children my home country. My ambition is to pave the way probably those will come after me, making it easier part featuring enthusiasm me I do any of their whole word to achieve their goals may nominated findings will develop react, but nice and wearing and then getting some voice in dispute.
Cesar Nivaldo Gon: My ambition is to pave the way for those who come after me, making it easier for future enthusiasts in AI from Brazil and the whole world to achieve their goals. Being nominated for the Google Developer Expert in Machine Learning and Linking Soft Voice in this field was a humbling experience. It's incredibly rewarding to see my work recognized by the broader tech community. What I'm most proud of is the tangible impact that my work has had on people's lives, whether it's through helping clients to achieve their business goals at Ci&T, contributing to the AI community's growth, or inspiring others through my content and projects. Thank you for watching!
I'm being expense, it's incredibly rewarding interesting might work it with good night by the brothers that culminated what I'm. Most proud of is I think your point that it might work.
Well I used to helping clients achieve their business goals at turnkey I keep thinking today I call me any girls are inspiring others to my concept and project.
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Bruno Guicardi: I hope you enjoyed our plant stories, updates, and highlights. Now, I would like to welcome Bruno to delve into our ESG initiatives and global talent strategy. Thank you, Cesar. And good morning, everyone. I'm delighted to join you once more.
I Hope you enjoyed our stories updates and highlights now I would like to welcome Bruno to delve into our ESG initiatives and global talent to strategy. Thanks.
Thank you Susan and good morning, everyone I'm delighted to join me once more.
Bruno Guicardi: Today, we released our second ESG report, which outlines our initiatives, actions, and objectives in the environmental, social, and governance realm. ESG stands as a foundational pillar at Ci&T, and the ability to articulate our thoughts and endeavors and share them with all our stakeholders is a source of pride and fulfillment for us. At Ci&T, we truly believe that our ESG approach reflects our core values and our belief in the interconnected growth of our business, our people, and society as a whole. Our ESG strategy is underpinned by a collective vision of fostering equitable advancement opportunities for all, providing education and professional pathways for underrepresented groups, and mitigating our environmental footprint to foster a more sustainable world.
To date, we've released our second ESG report, which outlines our initiatives actions and objectives in the environmental social and governance rounds, Yes, G stands as a foundational pillar at <unk> and the ability to articulate our thoughts and endeavors and shared them with our stakeholders is a source of free.
And fulfillment for us at.
At <unk>, we truly believe that our ESG approach reflects our core values and our belief in the interconnected growth of our business, our people and society as a whole.
Our ESG strategy is underpinned by our collective vision of fostering equitable advancement opportunities for all providing education and professional pathways for underrepresented groups in mitigating our environmental footprint to foster a more sustainable world.
Bruno Guicardi: I encourage you to download and read our essay, which is now available on the Investor Relations website. In 2023, our initiatives will continue to demonstrate steady progress. As you can see in this slide, we made important advancements in all three pillars, integrating these principles more deeply into our business strategy. Let me briefly describe our accomplishments last year. In the environmental pillar, we're excited to share that we measure 100% of our carbon footprint globally. And most importantly, we neutralize 100% of the carbon emissions generated by our operations worldwide through nature-based carbon removal projects that are applicable for scopes 1, 2, and 3. A great achievement indeed.
<unk> you to download and read our ESG report, which is now available in Investor Relations website.
In 2023, our initiatives continued to demonstrate steady progress as we can see on this slide we've made important advancements in all three pillars integrate in this principles more deeply into our business strategies.
Let me briefly describe our last year's accomplishments.
In the environmental pillar, we're excited to share that we measure 100% of our carbon footprint globally and most importantly, we neutralize 100% of the carbon emissions generated by operations worldwide.
Nature based carbon removal projects, that's applicable for scopes, one two and three.
Breach achievement indeed.
Additionally, we've just launched our environmental policy outlining the principles, we're committed to falling to further reduce our impact in key areas, such as climate waste and water management energy usage, and our interactions with clients and suppliers we.
We're delighted to announce that we submitted this commitment to the science based targets initiative.
Bruno Guicardi: Additionally, we've just launched our environmental policy, outlining the principles we're committed to following to further reduce our impact in key areas such as climate, waste and water management, energy usage, and our interactions with clients and supporters. We're delighted to announce that we have submitted this commitment to the Science-Based Targets Initiative. As a people business, we recognize that diverse and inclusive work is a fundamental driver of innovation. In this regard, we're able to finish 2023 with 50.3%... of our people coming from underrepresentation. Our commitment to the universe extends beyond our internal apps. We actively participate in various social responsibility initiatives within our community, aiming to foster practice that combats the marginalization of underrepresented groups. Last year, our initiatives reached 27,000 individuals, including educational projects to enhance program skills, financial contributions, and others, and governors.
As a people business, we recognize that a diverse and inclusive workforce as a fundamental driver of innovation and success. In this regard we're able to finish 2023 with a 53% of our people coming from underrepresented groups.
Our commitment to diversity extends beyond our internal efforts, we actively participate in various social responsibility initiatives within our communities aiming to foster practices that combat the marginalization of under represented groups last year, our initiatives reach of 27000.
Individuals, including educational projects to enhance programs skills financial contributions and other initiatives.
And the governors pillar, we've made progress in strengthening our practices, especially in risk management compliance. We completed the ISO 27001, 2022 certification process, which is related to security and data protection.
We are proud that our processes and controls are fully aligned with the information security practices within this framework.
Moving on to talk about our people.
We're proud to have a team digital specialists, who continually strive for excellence and innovation.
We're committed to fostering a culture of interpreter ship.
Our creativity and out of the box thinking courage and we believe that investing in our people is the key to our continued and sustained success.
Bruno Guicardi: We've made progress in strengthening our practice, especially in risk management and compliance. We completed the ISO 27001-2022 certification process, which is related to security and data protection. We are proud that our processes and controls are fully aligned with the information security practices within this framework. Moving on to talk about our... We're proud to have a team of digital specialists who continually strive for excellence in innovation. We're committed to fostering a culture of entrepreneurship, where creativity and out-of-the-box thinking are encouraged, and we believe that investing in our people is the key to our continued and sustained strength. We finished last year with 6,111 Jains, which is relatively stable compared to the third quarter of 2020. In addition, our attrition rate remains at historically low levels at 9.3. For the executive layer, the attrition rate is even lower at 3.6%.
We finished last year with 6111 sharing tiers, which was relatively stable compared to the third quarter of 2023.
In addition.
Attrition rate remains at historically low levels and line three and four the effectively or the attrition is even lower at three 6%.
As we look towards the future and focus on resuming growth. We are excited to be able to provide opportunities for career advancement and development for our employees.
People are our most valuable asset and we're committed to supporting them in their professional growth.
As we pioneer the advent of AI within our industry. We're excited about the opportunities it will bring to leverage our company and foster innovation and a great sense of belonging among our employees.
Together, we can achieve rethinks and driver company towards success I want to thank all sharing tiers for their continued support and trust in us as we work towards a brighter future for our company.
People.
No.
Stanley to comment on our financial results.
Thank you Bruno and good morning, everyone I am pleased to once again present, our financial results to all of you in the fourth quarter of 2023, our net revenue stood at $522 6 million Reais a decrease of 14, 6%.
Bruno Guicardi: As we look towards the future and focus on resuming growth, we are excited to be able to provide opportunities for career advancement and development for our employees. People are our most valuable asset, and we're committed to supporting them in their profession as we pioneer the advent of AI within our industry.
Year over year, primarily attributed to lower revenue from our top client.
Decline in revenue from select clients within our acquisition portfolio.
For the full year of 2023, our net revenue totaled $2 billion 233 million Reais, representing an increase of two 1% year on year or four 1% at constant currency within our guidance range.
Bruno Guicardi: We're excited about the opportunities it will bring to leverage our company and foster innovation within a great sense of belonging among our friends. Together, we can achieve great things and drive our company towards success. I want to thank all Chantiers for their continued support and trust.
We are pleased to report our continued focus on reducing client concentration and diversifying our revenue mix.
Stanley Rodrigues: As we work towards a brighter future for our company and our community, now, I invite Stanley to comment on our financial results. Thank you, Bruno, and good morning, everyone.
One key reason for this strategic shift is our success in gaining wallet share within our largest clients.
Stanley Rodrigues: I'm pleased to once again present our financial results to all of you. In the fourth quarter of 2023, our net revenue stood at R$522.6 million, a decrease of 14.6% year over year, primarily attributed to lower revenue from our top clients and a decline in revenue from select clients within our acquisition portfolio. For the full year of 2023, our net revenue totaled R$2,233,000,000, representing an increase of 2.1% year on year or 4.1% at constant currency within our guidance range. We are pleased to report our continued focus on reducing client concentration and diversifying our revenue mix. One key reason for this strategic shift is our success in gaining wallet share within our largest clients. Looking at revenue distribution by geography, North America remains our largest market, accounting for 44% of our total revenue in 2023.
Looking at the revenue distribution by geography, North America remains our largest market accounting for 44%, although total revenue in 2023.
Mature economies currently adds up to almost 60% of our total revenue providing resilience to our business led Tam represents 41% of lower revenue and continues to be an important region for growth in terms of year over year revenue growth.
We saw positive trends in multiple regions.
North America experienced a five 9% increase Europe grew by nine 1% and Asia Pacific surged by 28, 6% while revenue from Latam declined by five 2%. It remains a key area to leveraging.
Opportunities for growth.
Our revenue mix by industry verticals showcase our commitment to diversification while revenue from financial services remained stable. We saw a reduction in revenue contribution from consumer goods due to lower revenue from our top client.
Conversely revenue from technology, and telecommunications grew by 17, 4% year over year, driven by the expanded client base, resulting from our recent acquisitions.
Stanley Rodrigues: Mature economies currently add up to almost 60% of our total revenue, providing resilience to our business. LATAM represents 41% of our revenue and continues to be an important region for growth. In terms of year-over-year revenue growth, we saw positive trends in multiple regions. North America experienced a 5.9% increase, Europe grew by 9.1%, and Asia-Pacific surged by 28.6%.
In 'twenty <unk>, three we significantly improved the distribution of revenue from our key clients, reducing revenue concentration the revenue share from our top one client decreased from 15% in 'twenty 'twenty, 228% in 'twenty three why are they collect.
Stanley Rodrigues: While revenue from LATAM declined by 5.2%, it remains a key area to leveraging opportunities for growth. Our revenue mix by industry verticals showcases our commitment to diversification. While revenue from financial services remained stable, we saw a reduction in revenue contribution from consumer goods due to lower revenue from our top clients.
<unk> share of the top 10 clients reduced by 10 percentage points from 49, 6% in 2022 to 39, 7% in 2023.
Looking ahead this development signifies the diversification of our revenue streams as we broaden our client base and expand into new geographic regions and industries.
Stanley Rodrigues: Conversely, revenue from technology and telecommunications grew by 17.4% year-over-year, driven by the expanded client base resulting from our recent acquisitions. In 2023, we significantly improved the distribution of revenue from our key clients, reducing revenue concentration. The revenue share from our top one client decreased from 15% in 2022 to 8% in 2023, while the collective share of the top 10 clients decreased by 10 percentage points from 49.6% in 2022 to 39.7% in 2023. Looking ahead, this development signifies the diversification of our revenue streams as we broaden our client base and expand into new geographic regions and industries. Now, turning our attention to our client base. In 2022, we saw significant growth in our client base, both organically and through strategic acquisitions.
Now turning our attention to our client base.
In 2022, we saw significant growth in our client base, both organically and through strategic acquisitions as we look to 'twenty <unk> three our focus has shifted towards maximizing wallet share within our largest clients cultivating strong relationship.
Hips and continually expanding our market reach there.
This is evidenced by the expansion of the number of clients that are generating revenue exceeding 10 million Reais from 38 in 2022 to 50 in 2023.
Despite facing economic challenge, our net revenue retention rate remained strong at 96% in 'twenty three showcasing our ability to navigate tough financial landscapes.
Over the past five years, our net revenue retention rate has been an impressive 120%.
This underscores our resilience and our capability to consistently deliver value to our clients adapting our strategies as needed, thereby fostering long term growth and profitability.
Stanley Rodrigues: As we look to 2023, our focus has shifted towards maximizing wallet share within our largest clients, cultivating strong relationships, and continually expanding our market reach. This is evident by the expansion of the number of clients that are generating revenue exceeding R$10 million from R$38 million in 2022 to R$50 million in 2023. Despite facing economic challenges, our net revenue retention rate remained strong at 96% in 2023, showcasing our ability to navigate tough financial landscapes. In fact, over the past five years, our net revenue retention rate has been an impressive 120%.
Moving on allow me to provide an overview of our financial performance for the fourth quarter and the full year of 2023.
Our adjusted EBITDA was $103 6 million Reais in the fourth quarter of 2023 compares to $127 4 million in 2022.
EBITDA margin was 19, 8% for the full year of <unk> three D. Adjusted EBITDA increased to 432 million up three 5% when compared to an adjusted EBITDA of $418 million in.
2022.
Stanley Rodrigues: This underscores our resilience and our capability to consistently deliver value to our clients, adapting our strategies as needed, thereby fostering long-term growth and profitability. Moving on, allow me to provide an overview of our financial performance for the fourth quarter and the full year of 2023. Our adjusted EBITDA was R$103.6 million in the fourth quarter of 2023 compared to R$127.4 million in 2022. The EBITDA margin was 19.8%.
The EBITDA margin rose to 19, 3% in 2023 slightly higher than 2022.
Throughout 2023, our efforts were concentrated on identifying opportunities to optimize our costs and SG&A expenses. This enabled us to sustain healthy margins during this lower growth period.
As we move into 'twenty 'twenty four we remain cautious in managing our expenses to adapt Lee navigate the prevailing environment.
Finally in 'twenty <unk>, three we generated 414 million reais in cash from operating activities compared to $161 million in 2022, and the expansion of 158% year over year.
Stanley Rodrigues: For the full year of 2023, the adjusted EBITDA increased to $432 million, up 3.5% when compared to an adjusted EBITDA of $418 million in 2022. The EBITDA margin rose to 19.3% in 2023, slightly higher than in 2022. Throughout 2023, our efforts were concentrated on identifying opportunities to optimize our costs and SG&A expenses, which enabled us to sustain healthy margins during this lower growth period. As we move into 2024, we remain cautious in managing our expenses to adeptly navigate the prevailing environment. Finally, in 2023, we generated R$414 million in cash from operating activities, compared to R$161 million in 2022, an expansion of 158% year-over-year. This represents a cash conversion to adjusted EBITDA of 96%, demonstrating our robust capacity to generate cash from our core business activity.
A year.
This represents a cash conversion to adjusted EBITDA of 96%, demonstrating our robust capacity to generate cash from our core business activities.
Such a robust cash generation allow us to reinvest in our business any strategic opportunities that will drive sustainable growth such as the floor platform and other AI related projects.
Now I invite <unk> to comment on our business outlook for the year coming.
Thank you our history, we expect our natural rebate in the first quarter of 244 to be at least 520 million on a reported basis, assuming an average FX rate of five Brazilian reais per U S dollars in the first quarter of 2024.
For the full year of 'twenty 'twenty four we expect our net revenue growth at <unk>.
<unk> to be in the range of minus two 5% to two 5% year over year. In addition, we estimate our adjusted EBITDA margin to be in the range of 17% to 19%. Thank.
Stanley Rodrigues: Such a robust cash generation allows us to reinvest in our business in strategic opportunities that will drive sustainable growth, such as the flow platform and other AI-related projects. Now, I invite Cesar back to comment on our business outlook for the year ahead. Thank you, Stanley. We expect our net revenue in the first quarter of 2024 to be at least 520 million reais on a reported basis. Assuming an average FX rate of 5 Brazilian reals per U.S. dollar in the first quarter of 2021.
Thank you all for attending our call today, we now conclude the presentation and begin the Q&A session.
Okay.
Alright. Thank you all for attending our call today, we will now begin the question and answer session.
I will announce each party's fence name once you hear your name. Please mute your line and ask your question then when you are done please mute your line.
Cesar Nivaldo Gon: For the full year of 2024, we expect our net revenue growth at constant current rates to be in the range of minus 2.5% to 2.5% year-over-year. In addition, we estimate our adjusted EBITDA margin to be in the range of 17% to 19%. Thank you all for attending our call today. We now conclude our presentation and begin the Q&A session. All right.
The first question comes from Eduardo <unk> from UBS.
Please go ahead.
Hi, everyone. Thanks for taking my question.
I would like to better understand where it takes into consideration further revenue and margin guidance. Please.
Thank you Eduardo I can get this one.
In terms of revenue for guidance.
We are considering that we are coming off of a very unusual year.
So there is still uncertain in the microwave in corporate it spending environment.
Operator: Thank you all for attending our call today. We'll now begin the question and answer session and announce each participant's name. Once you hear your name, please unmute your line and ask your question. Dan, when you're done, please mute your line.
And so we are planning on a stable Q1, followed by incremental growth not only in the <unk>.
Following quarters of the year, but also.
And the following years, so resuming already standard growth trajectory primary drivers I think I see two main drivers first is we have some of our large clients gaining traction so to give you a data point our top 10 clients are expanding.
Operator: The first question comes from Eduardo Rubi from UBS. Eduardo, please go ahead. Hi everyone, thanks for taking my question. Well, I would like to better understand what you are taking into consideration for the Revenue and Margin Guidance List. Thank you, Eduardo. I can get this one.
Mid to high single digits.
Theyre still grow along the year and we have also.
New set of new clients that landed.
We landed in the second half of last year that are now ramping up.
Like Domino's Pizza as you saw in our highlights and also I would mention to let's say deal risk factors in our projections. The first as our top one 2023 tougher when the client is now stable.
Stanley Rodrigues: In terms of revenue guidance, I think we are considering that we are coming out of a very unusual year. So there is still uncertainty in the macro and corporate spending environment. And so we are planning a stable Q1, followed by incremental growth, not only in the following quarters of the year but also, in the following years, resuming our standard growth. Primary drivers, I think I see two main drivers.
One of the challenges of last year.
If youll see our last 12 months I think we gradually replace a number of these small uptick deals, especially prone they're acquired.
Portfolio with good number a good number of large clients. So.
Those are basically the primary drivers for our revenue guidance in terms of margin.
We are expecting and projecting.
Stanley Rodrigues: We have some of our large clients gain traction. So to give you a data point, our top 10 clients are expanding mid to high single digits; they used to grow along the year. And we also have a set of new clients that we landed in the second half of last year that are now rampant, like Domino's Pizza, as you saw in the... And also, I would mention, say the risk factors in our projections. The first is our top one, 2023 top one client is now stable, was one of the challenges of last year. And if you look at our last 12 months, I think we gradually replaced a number of small-tech deals, especially from the acquired ones. Portfolio with a good number of large.
Costs and reflect an inflation combined with a lower price elasticity.
And as we did last year, we are keeping our price cost discipline.
So as you can see in our above average.
Turning to the trading numbers of EBITDA and cash flow generation.
And then of course, we continued to invest in our teams.
In a way to prepare for Brazil growth in AI.
Cit's flow just for rich.
Okay. Thank you very much very clear.
Thank you Richard.
Thank you Eduardo on next question comes from Gabrielle amortize it over there.
Please go ahead.
Hello, everyone. Thank you for taking my questions, we have to on our side. The first one is regarding the financial statements.
Stanley Rodrigues: These are basically the private drivers for our revenue guys. In terms of margin, I think we are expecting and projecting cost inflation combined with lower price elasticity.
Smith.
We expect potential Fargo restatement going forwards are all of the adjustments should be made at watts.
Stanley Rodrigues: And as we did last year, we are keeping our price cost discipline. So, as you can see, now we're above average. 2023 numbers of EBITDA and cash flow generation. And, of course, we continue to invest in our teams in a way to prepare for resume growth and the AI floor. Okay, thank you very much, very clear. Thank you, Eduardo. Thank you, Eduardo. Our next question comes from Gabriela Moraes from Ita BBA. Gabriela, please go ahead.
And the second one is also a follow up regarding the guidance how do you see the recovery Act service my market throughout the year like so expect a better.
Markets in the second half of the year and also used to have some color regarding what you expect in terms of marketing environment start to pop up in the pipe as well. Thank you I'll ask guy.
Oh I didn't get the first month and thank you for the question.
Operator: Hello everyone. Thank you for taking my questions. We have two on our side.
Well with regard to the restatements, we estimate that we will release the full earnings release in one week or so.
Operator: The first one is regarding the financial restatement. Do you expect potential for the restatement going forward? Or should all the adjustments be made at once?
And no later than the 28th of March we will release. The 20 20-F, So we will furnish the.
Restatements for the quarters within the additional 6K and the same date the same 20 year to date.
Stanley Rodrigues: And the second one is also a follow-up regarding the guidance. How do you see the IT service market recovering throughout the year? Should we expect a better market in the second half of the year? And also, if you have some color regarding what you expect in terms of the marketing environment for 2025, guys. Well, I can get the first one.
And of course, the full year Restatements will you will see in the 20-F.
2022 rates.
Just to add to add to that it's important to mention that we expect all that.
Adjustments necessary, we've seen there is financial statements that we will report with the 20-F. So we do not project any further restatement going forwards it's already all contemplated in the announcement we provided this morning.
Let me, let me address the second part of the second questions.
Stanley Rodrigues: Thank you for the question, Gabriela. Well, with regard to the restatements, we estimate that we will release the full warnings in one week or so, and no later than the 28th of March, we will release the 20 acts.
Nobody Ella.
In terms of the demand environment.
<unk>.
Pursuit of a better environment, when we compared to.
Last year at the beginning of last year.
Stanley Rodrigues: So we will furnish the restatements for the quarters within an additional 6K on the same date, the same 20th date. And, of course, the full year restatements you will see in the 20F for 2022. Just to add to that, Gabriela, it's important to mention that we expect all of this, and we will make the necessary adjustments within these financial statements that we'll report on the 20th. So we do not project any further restatement going forward. It's already all contemplated in the announcement we provided this morning. Let me address the second part of the second question.
Of course with cautious optimism.
We see clearly a better commercial activities activity and pipeline compared to last year.
So and enhanced visibility for the first half of the year.
And we still we still some see some live off of uncertain for the second level of the year. However, I think.
My perspective is that the conservative investment in digital in the recent years are now become kind of evident.
The competitive.
<unk> landscape and if you add artificial intelligence. This equation is kind of inevitable that companies in general we will have to accelerate their digital strategy.
Cesar Nivaldo Gon: Thank you, Gabriella. In terms of the demand environment, I think we perceive a better environment when compared to last year and the beginning of last year, of course, with cautious optimism. We see clearly more commercial activity and pipeline compared to last year, and also enhanced visibility for the first half of the year.
Especially in the second half of the year and in 2025. So this is my perspective.
In terms of that.
Okay.
Hello, guys. This is very very clear thank you.
My pleasure.
Thank you Gabriela our next question comes from jewelry biopsy from Canaccord.
Please go ahead.
Good morning, gentlemen, and thank you for taking my questions first one is.
Cesar Nivaldo Gon: And we still see some level of uncertainty for the second half of the year. However, I think my perspective is that the conservative investment in digital in recent years is now kind of evident in the competitive competitive landscape. And if you add artificial intelligence, this equation is kind of inevitable that companies, in general, will have to accelerate their digital strategies, especially in the second half of the year and in 2025. Thank you a lot, guys. This is very, very clear.
I think I heard since our that you said that your largest customer.
Largest clients going to be stable here in 2024.
Just wondering what is the outlook for.
Maybe a year or two through five customers.
And then secondly is it may be a little early but.
Is it possible to quantify how many perhaps points of revenue maybe coming in 2024 from AI.
Operator: It's been my pleasure. Thank you, Gabriela. Our next question comes from Joey Vassi from Canaccord. Joe, please.
Operator: Good morning, gentlemen. Thank you for taking my question. First one is, I think I heard Cesar say that your largest company or your largest client is going to be stable here in 2024. I was just wondering, you know, what is the outlook for your maybe your two through five customers? And then secondly, it may be a little early, but... Is it possible to quantify how many points of revenue may be coming in 2024 from AI-related projects? Thank you. Thank you, Joe.
<unk> related projects. Thank you very much.
Thank you Richard regarding your first question I think our.
Top one client as forecasted.
<unk>.
She is a stable.
A year and.
We are seeing.
Higher growth in our top 10.
Clients, we are forecasting.
Mid to high single digital growth.
Our top 10 clients so.
Including the.
Stable.
But the one last year.
So.
And the second question regarding <unk>.
However, I think the way we are approaching.
Cesar Nivaldo Gon: Regarding your first question, I think our top one client is, see this table throughout the year. And we are seeing higher growth in our top 10. We are forecasting mid to high single digital growth in our top 10, including the one that topped it last year. And the second question concerns. I think the way we are approaching AI is... in such a comprehensive way that, of course, we have AI-specific projects, but in general, we are turning every single engagement into an AI engagement with CI&T flow. So, and also throughout the year, we expect 100% of our offerings will be somehow powered by AI, especially in efficiency. Perspectives. So it's like that.
AI is.
Such a comprehensive away.
Of course, we have the AI specific.
The projects, but in general we are thoroughly every single engagement AI engagement with <unk> flow. So.
And then also along the year, we expect our 100% of our offerings will be somehow powered by AI, especially officials.
Perspective so.
It's <unk>.
Really I think.
I know, we have 35 of our larger clients already engaged with us with <unk> flow.
So we are of course, we're tansey hand, with those clients discussing your AI strategy and roadmap.
Cesar Nivaldo Gon: Really, I think... By now, we have 35 of our larger clients already engaged with us, in CI&T flow. And also, we are, of course, hand in hand with these clients discussing their AI strategy and around this disruption. So I think it's hard to predict, but I would say that probably by Q4 of this year, we probably will have 80 to 90% of all engagement of Ci&T somehow impacted or related somehow to AI. It's basically because of the flows strategy, end-to-end blah blah, for Producing Digital.
Around this disruption so I think it's hard to predict but I would say that probably by Q4 of this year.
Probably we will have 80% to 90% of all engagement Gulf's JV somehow.
Back to or related somehow to AI, it's basically because our <unk>.
<unk>, Florida strategies.
Our end to end platform.
Or reducing digital solutions.
Operator: Great. Thank you, Cesar, don't play. Thank you, Joe. So we have one question here via email. Could you please provide more context on the cash generation for the year and what should we expect going forward in that? Well, I can take up that one as well.
Great. Thank you chose our.
My pleasure.
Thank you Joe.
So we have one question here via email could you. Please provide more context on the cash generation for the year ended what should we expect going forward in that regard.
Well I can take that one as well.
Stanley Rodrigues: Well, thank you for the question. Historically, we are running a business that generates a solid operating cash flow. 2023 is another year in this track record, a year without M&A, a year with lower growth, and, as a consequence, lower working capital demand. For the future, we should expect that we are in the range of 50% to 70% cash conversion from EBITDA, as we have been performing historically, right? And mainly because we expect the resumption of our growth trajectory, so that will demand more cash in comparison to 2023. Seasonally, cash generation is stronger in the second half, so you would expect in the first half of the year a lower cash generation, and towards the end of the year, in the second half, a greater amount of cash generation.
Thank you for the question.
Historically, we have.
We are running a business that generates a solid operating cash flow.
2023 it's another year in this track record.
On a year without M&A and year with lower growth.
And as a consequence, lower working capital demand.
For the future we should expect that we are in the range of 50% to 70% cash conversion from EBITDA as we have been performing at historically right.
And mainly because we expect the resuming our growth trajectory so that will demand more cash in comparison to 2023.
Seasonally cash generation is stronger in the second half.
So you would expect.
First half of the year lower cash generation and towards the end of the year second half.
The greater amount of cash generation.
Thank you Sally.
Operator: So that concludes our Q&A session. Thank you all for attending our event today. And now I invite Cesar Gon to proceed with his closing remarks. Thank you all for participating in our call. Thank you, my friends. DuPont, Stanley, and Brenno, joining me on this call. Once again, I need to thank all Ci&Ters around the world for their hard work and achievement, and also for the amazing trajectory of building Ci&T. So stay well, and See you soon.
So that concludes our Q&A session. Thank you all for attending our event today and now invite says they're going to proceed with his closing remarks.
Thank you all for participating on our call here.
Here with France, Kobo steadily and Bruno joined.
Joining me on this call once again.
I need to thank OCI yours or around the world.
Their hard work and the children.
And also to <unk>.
Board.
It does.
Amazing trajectory building <unk>.
So stay well.
I see you soon.
Thank you.
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John.
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