Q1 2025 CI&T Inc Earnings Call
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Operator: in a world that's always on transformation.
Speaker Change: In a world that's always on transformation. C-I-N-T is your go-to-tech transformation specialist, helping you navigate opportunities and co-create solutions at every step of your technology journey.
Operator: Ci&T is your go-to tech transformation specialist, helping you navigate opportunities and co-create solutions at every step of your technology journey. We get things done quickly, efficiently, and at scale. By combining the best human expertise with the power of our very own AI platform, Ci&T Flow, our mission, to design and develop tech solutions that drive growth and boost your business value.
Speaker Change: We get things done quickly, efficiently, and at scale. By combining the best human expertise with the power of our very own AI platform, Ci&T Flow, our mission to design and develop tech solutions that drive growth and boost your business value.
Operator: When it comes to navigating change, we turn challenges into possibilities, leading the way to a brighter future. We're right by your side, innovating together and pushing you forward. That's what we do.
Speaker Change: When it comes to navigating change, we turn challenges into possibilities.
Speaker Change: leading the way to a brighter future. We're right by your side, innovating together and pushing you forward. That's what we do. Our deep know how covers the entire tech development cycle.
Operator: Our deep know-how covers the entire tech development cycle, from strategy to AI, customer experience, software development, cloud, and data services. Navigate technology change with Ci&T to reach new heights. Navigate change with Ci&T.
Speaker Change: From strategy to AI, customer experience, software development, cloud and data services. Navigate technology change with Ci&T to reach new heights.
Speaker Change: Hello, welcome to Ci&T Ernesto for the first quarter of 2025. I am Eduardo Galvao, Director of Investor Relations at Ci&T
Eduardo Galvao: Hello, welcome to Ci&T earnings call for the first quarter of 2025. I am Eduardo Galvao, Director of Investor Relations at Ci&T. Joining me today are Cesar Gon, our founder and CEO, Bruno Guicardi, founder and president for North America in Europe, and Stanley Rodrigues, our CFO.
Speaker Change: Joining me today are Cesar Gon, our founder and CEO , Bruno Guicardi, founder and president for North America in Europe , and Stanley Rodrigues, our CFO .
Eduardo Galvao: This event is being recorded and all participants will be in a listen-only mode during the company's presentation. After that, there will be a Q&A session. If you'd like to submit a question, please send it via email to investors at cint.com.
Speaker Change: This event is being recorded and all participants will be in a listen only mode during the company's presentation.
Speaker Change: After that, there will be a Q&A session. If you'd like to submit a question, please send it via email to investorsatci&t.com.
Eduardo Galvao: 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. They are subject to known and unknown risks and uncertainties, which could cause actual results to differ from those expressed on this call. We caution you not to place undue reliance on these forward-looking statements, as they are valid only as of the date when made.
Speaker Change: The presentation is available on the company's investor relations website and the replay will be available shortly after the event is concluded.
Speaker Change: Some of the matters we will discuss on this call including our expected business outlook are forward-looking statements.
Speaker Change: They are subject to known and unknown risks and uncertainties, which would cause actual results to defer from those expressed on this call. We caution you not to place undue reliance on these forward-looking statements as their valid only as of the date when made.
Eduardo Galvao: During this presentation, we'll comment on certain non-IFRF financial measures to evaluate our Please refer to the reconciliation tables of non-IFRS measures in the earnings release for more details. Our agenda for today includes an overview of our quarterly highlights followed by some of our business. We'll then talk about our people and our financial resources.
Speaker Change: During this presentation, we'll comment on certain non-IFRS financial measures to evaluate our business. Please refer to the reconciliation tables of non-IFRS measures in the earnings release for more details.
Speaker Change: Our agenda for today includes an overview of our quarterly highlights, followed by some of our business cases.
Speaker Change: We'll then talk about our people in our financial results. At this time, I'll pass it on to Cesar Gon to begin our presentation. Cesar, please.
Cesar Gon: At this time, I'll pass it on to Cesar Gon to begin our presentation. Cesar, please. Thank you, Galvao, and good afternoon, everyone. The software development industry is rapidly evolving due to AI advancements and shifting client expectations. Companies are looking for partners who not only understand technology but can also align it with their business strategies to achieve transformative results. Ci&T has been a trusted partner in digital transformation for decades. Now with our Ci&T Flow platform, we are strengthening relationships with our existing clients and unlocking new business opportunities. Ci&T Flow encapsulates our 30 years of expertise in building digital solutions, serving as a powerful platform that accelerates AI adoption and fosters enterprise-wide collaboration and knowledge sharing.
Thank you Galvao and good afternoon, everyone!
Cesar Gon: The software development industry is rapidly evolving due to AI advancements and shifting client expectations.
Cesar Gon: Companies are looking for partners who not only understand technology but can also align it with their business strategies to achieve transformative results.
Cesar Gon: Ci&T has been a trusted partner in digital transformation for decades.
Now with our Ci&T Flow platform.
Cesar Gon: We are strengthening relationships with our existing clients and unlocking new business opportunities.
Cesar Gon: Ci&T flow encapsulates our 30 years of expertise in building digital solutions, serving as a powerful platform that accelerates AI adoption and foster enterprise-wide collaboration and knowledge is sharing.
Cesar Gon: Our focus has been on delivering cohesive solutions that seamlessly integrate technology with business transformation, empowering our clients to thrive in an AI-driven world. We believe in a world where technology is everywhere and business remains the force that gives it meaning and impact. At Ci&T, we make sure one powers the other, because the future of business is tech, and the future of tech is business.
Cesar Gon: Our focus has been on delivering cohesive solutions that seamlessly integrate technology with business transformation, empowering our clients to thrive in an AI-driven world.
We believe in a world where technology is everywhere.
Cesar Gon: and Business Remains the Force that gives it meaning and impact. [inaudible]
At Ci&T, we make sure one powers the other.
because the future of business is back. [inaudible]
and the future of DAC is business.
Cesar Gon: And this is a secular opportunity Ci&T is uniquely positioned to capture over the next 10 years by continuously reinventing how business and technology move forward together.
Cesar Gon: And this is a secular opportunity Ci&T is uniquely positioned to capture over the next ten years by continuously reinventing how business and technology move forward together.
Cesar Gon: Now moving on to our financial highlights for the first quarter of 2025. In a dynamic business environment, I am pleased to report that Ci&T continues to demonstrate resilience in our performance and above-average revenue growth. In the first quarter of 2025, we achieved a net revenue of US$110.9 million. making our organic net revenue growth at constant currency standing at 13.7% year-over-year. Our Adjust EBITDA for the quarter increased by 15.2%, reaching $19.6 million, with an Adjust EBITDA margin of 17.6%.
Cesar Gon: Now moving on to our financial highlights for the first quarter of 2025.
Cesar Gon: in a dynamic business environment. I'm pleased to report that Ci&T continues to demonstrate your resilience in our performance and above average revenue growth.
Cesar Gon: In the first quarter of 2025, we achieved a net revenue of $110.9 million US dollars.
Cesar Gon: making our organic natural revenue growth at constant current, sustaining at 13.7% year-old
Cesar Gon: a solid number considering the typical seasonality of our business. This margin reflects our operational efficiency and showcases our ability to generate a robust cash flow.
a solid number considering the typical seasonality of our business.
Cesar Gon: This margin reflectors our operational efficiency and showcase our ability to generate the robust cash flow.
Cesar Gon: We are proud of the progress in our AI initiatives, driving efficiency, enabling impactful use cases, and delivering measurable results. Commitment to innovation keeps us well positioned to meet evolving client needs.
Cesar Gon: We are proud of the progress in our AI initiatives, driving efficiency and enabling bot-full use cases, and delivering measurable results. [inaudible]
Cesar Gon: Our commitment to innovation keeps us well positioned to meet evolving client needs.
Cesar Gon: Now let's explore some inspiring client success stories that showcase the diverse and powerful applications of AI.
Cesar Gon: Now let's explore some inspiring clients' success stories that showcase the diverse and powerful applications of AI.
Cesar Gon: We are proud to announce we have been awarded the Digital Agency of Record for Volkswagen of America from 2024 to 2027. In just nine months, we've already achieved meaningful impact, enhancing the experience for Volkswagen's customers, empowering its dealers and enabling its employees.
Cesar Gon: We are proud to announce we have been awarded the Digital Agency of Record for Volkswagen of America from 2024 to 2027. In just nine months, we've already achieved meaningful impact, enhancing the experience for Volkswagen's customers, empowering its dealers and enabling its employees. This success is driven by our product-led approach, gen-AI-enabled teams and an efficient near-shore delivery model. We don't just deliver fast, we deliver value. Together we're driving Volkswagen's digital future.
Cesar Gon: And we're just getting started.
Cesar Gon: As Nestlé reimagines how it connects with consumers, our partnership helps turn a promotional platform into a dynamic and interactive digital hub. By redesigning the Eu Quero Nestlé platform, we've created a personalized experience that understands and evolves with its users and has driven real results. A 300% increase in campaign conversions in the first two months and 6 million consumers impacted in 2024 alone. We're proud to continue supporting Nestlé in shaping the future of consumer engagement and building meaningful connections.
Cesar Gon: We believe that becoming an AI first company starts from within. By empowering our people to innovate boldly and lead confidently with AI. Our financial team transformed a three-day process into a 15-minute task with fewer errors and a smoother and more efficient process. By automating long-term incentive workflows with CI&T flow. Mapping risks and processes used to take 37 hours per task. With AI driven automation, compliance is now faster, risks are easier, and we've cut that effort to just 18 hours. Less time, more precision. This is what's possible when AI first professionals have the right tools and autonomy to innovate.
Cesar Gon: We're not just helping our clients embrace the AI revolution. We're living it ourselves.
Cesar Gon: The future isn't waiting and neither are we.
Cesar Gon: In 2021, Culligan International, the global leader in water treatment solutions, set an ambitious goal to create a unified end-to-end digital customer experience across its operations. This initiative aimed to enhance customer experience, drive financial impact, and streamline business units at differing stages of digital capability. To bring this vision to life, Culligan partnered with Ci&T to build a robust digital experience platform with consistent global branding, shifting to a consumer-first digital presence across markets. The platform enhances the customer experience, taking into account the varying business operational needs today, while providing scalability across the complete customer journey with efficient customer acquisition and onboarding, 24-7 access to e-commerce, account management, and automated service requests, all online.
Cesar Gon: In 2021, Collagen International, the Global Leader in Water Treatment Solutions.
Cesar Gon: Set an ambitious goal, to create a unified end-to-end digital customer experience across its operations. This initiative aimed to enhance customer experience, drive financial impact, and streamline business units at differing stages of digital capability. To bring this vision to life,
Cesar Gon: experience taking into account the varying business operational needs today while providing scalability across the complete customer journey with efficient customer acquisition and onboarding. 24-7 access to e-commerce, account management and automated service requests all online, with features like automated communications, recurring orders and machine servicing, the DXP improved convenience, drives loyalty and is built to grow and adapt with customer needs worldwide. 24-7 access to e-commerce,
Cesar Gon: With features like automated communications, recurring orders, and machine servicing, the DXP improves convenience, drives loyalty, and is built to grow and adapt with customer needs worldwide.
Cesar Gon: Since its 2022 U.S. pilot, the DXP has expanded to 10 countries, with plans to launch in six more in 2025. The platform continues to evolve, unlocking efficiencies, delivering new capabilities to individual business units and driving measurable business impact. Central to Culligan's global growth strategy, the DXP ensures a consistent, frictionless experience across regions. With an architecture designed for continuous improvement, the platform is regularly enhanced with new features and functions. This not only fuels growth, but also reflects Culligan's commitment to sustainability and ongoing digital transformation across its global portfolio.
Cesar Gon: The platform is regularly enhanced with new features and functions. This not only fuels growth, but also reflects Collagen's commitment to sustainability and ongoing digital transformation across its global portfolio.
Cesar Gon: This is where transformation becomes story. Unlocked data, redesigned experiences, after sales reimagined. And that's just the start.
Cesar Gon: 90 plus clients, 5K plus users, and outcomes too big for one slide. It's all here.
Cesar Gon: Check out our client stories and see how we help global brands navigate change.
Cesar Gon: We reaffirm our commitment to a sustainable and innovative future with the launch of our fourth global ESG report. This milestone reflects our commitment to building a future rooted in sustainability, innovation, and inclusion. It's a testament to how we transform challenges into opportunities, creating value not just for business but for society and the planet. Through impactful actions and bold strategies, we're shaping a thriving future. One where technology drives
Cesar Gon: We reaffirm our commitment to a sustainable and innovative future with the launch of our fourth global ESG report. This milestone reflects our commitment to building a future rooted in sustainability, innovation, and inclusion. It's a testament to how we transform challenges into opportunities, creating value not just for business but for society and the planet.
Cesar Gon: Through impactful actions and bold strategies, we're shaping a thriving future. One where technology drives transformation, diversity fuels progress, and environmental stewardship leads the way.
Cesar Gon: Explore our 2024 ESG report, and join us in making a lasting impact.
Speaker Change: MWC 2025 is all about gender day, right? It's going to have been different. The telecommunications industry is one of the best sectors for you to apply that kind of technology because of the amount of areas, the ability to explore your technology and the amount of real business problems to solve. So from BTC interactions and HNC, the customer experience is all to be to be integrations, infect generation, set of experimentation. So, BTC.
Operator: MWC 2025 is all about generative AI, right? It couldn't have been different.
Operator: The telecommunications industry is one of the best sectors for you to apply that kind of technology because of the amount of areas that you can explore the technology and the amount of real business problems to solve. So from B2C interactions, enhancing the customer experience as a whole, to B2B integrations, impact generation, set up experimentation. So business leaders, they're now focusing more on the real problem they are trying to solve and the real value they are trying to bring because they know that the how is less important now.
Speaker Change: They're now focusing more on the real problem they have tried to solve and the real value they are trying to bring because they know that the how it's not important now.
Speaker Change: In partnership with AI Brazil, we welcomed market leaders to our campaign of headquarters for an immersive experience in the AI first ecosystem. Sharing insights, aligning visions, and exploring opportunities shaping the future of innovation. It was a valuable moment of collaboration with the AI Brazil community and partners who share our vision, connecting people and technology to create real impact. And I think this vision of the market, this vision of technology.
Operator: In partnership with AI Brazil, we welcomed market leaders to our Campinas headquarters for an immersive experience in the AI-first ecosystem, sharing insights, aligning visions and exploring opportunities shaping the future of innovation. It was a valuable moment of collaboration with the AI Brazil community and partners who share our vision, connecting people and technology to create real impact.
Operator: And I think this vision of the market, this vision of technology, of C&T, is super important. You help us by opening this horizon and bringing a lot of what the market is doing. So having C&T as a partner is essential for us to be successful.
Operator: A decade-long partnership with AWS has been transformative, delivering meaningful results.
Operator: Being named AWS's Sustainability Partner of the Year in 2024 was a proud milestone, strengthened further by hosting the AWS team at our Campinas headquarters. This partnership inspires us to keep innovating and driving sustainable impact. AWS, our partner in navigating change.
Operator: AWS Sustainability Partner of the Year At IT Forum TrnCoso, we stood out among industry leaders. With 400 participants, including 120 CIOs from major companies, we shared insights on shaping the future of technology.
At IT Forum Troncoso, we stood out among industry leaders.
Speaker Change: With 400 participants, including 120 CIOs from major companies, we shared insights on shaping the future of technology. Our CEO , Cesar, shared how Brazil's talent and cultural adaptability position the country and C-I-N-T as C-drivers in the global AI revolution.
Operator: Our CEO, Cesar, shared how Brazil's talent and cultural adaptability position the country and Ci&T as key drivers in the global AI revolution. This is the collaboration and innovation that help clients navigate change on a global scale.
Speaker Change: This is the collaboration and innovation that help clients navigate change on a global scale.
Operator: The Flux series, AI Leaders Summit, brings together policymakers, SMEs, and innovators to address the challenge of unlocking AI's transformative potential. As the preferred data and AI infrastructure partner, we introduced Ci&T Flow at the summit.
Speaker Change: The Flux series, AI Leaders Summit brings together policymakers, SMEs, and innovators to address the challenge of unlocking AI's transformative potential. As the preferred data and AI infrastructure partner, we introduced the CIMP flow at the summit. This is an essential step in shaping Singapore's digital future, and we're proud to be part of this movement towards smarter, more innovative businesses.
Operator: This is an essential step in shaping Singapore's digital future, and we're proud to be part of this movement towards smarter, more innovative businesses.
Operator: What a journey Web Summit Rio 2025 was. We had the opportunity to bring essential conversations about innovation, cultural transformation, and the impact of artificial intelligence to the stage. A few days of intense exchange, learning, and new connections reinforced the importance of building the future through collaboration and innovation to navigate the AI revolution.
Speaker Change: These are just a few examples of the value we delivered to our clients.
Operator: These are just a few examples of the value we deliver to our clients.
Bruno Guicardi: Now I'd like to invite Bruno to provide insights into our Global Delivery Model, the evolution of our offerings, and our talented strategies. Thank you, Cesar, and good afternoon, everyone. I'm excited to share our progress regarding our people in this first quarter of the year. We entered Q1 with 7,400 employees, a 21.6% increase compared to Q1 2024. This growth demonstrates our commitment to strengthen our teams and cultivate the next generation of leaders in technology. It's part of our NextGen program. We successfully onboarded 420 trainees. This initiative not only enriches our organizational culture but also prepares today's AI professionals for the challenges they will face in the future.
Speaker Change: Now I would like to invite Bruno to provide insights into our global delivery model, the evolution of our offerings, and our talent strategy.
Bruno: Thank you, Cesar. And good afternoon, everyone. I'm excited to share our progress regarding our people in this first quarter of the year.
Bruno: We entered Q1 with 7,400 employees, a 21.6% increase compared to Q1 2024. This growth demonstrates our commitment to strengthen our teams and cultivate the next generation of leaders in technology.
Bruno: A part of our next Jain program with successfully onboarded 420 trainees.
Bruno: This initiative not only reaches our organizational culture but also prepared today's AI professions for the challenges that they will face in the future. [inaudible]
Bruno Guicardi: Another group of trainees will join us in Colombia in the second half of this year, broadening learning and growth opportunities for young talents in the region. These trainees will undergo a comprehensive AI training and become billable in the second half of the year. Our focus on attracting and developing high-potential individuals is vital to our ongoing success. By fostering a culture of innovation and continuous learning, we ensure that our teams are well equipped to drive value for our clients and contribute to our collective growth.
Bruno: Another group of trainees who join us in Colombia in the second half of this year, broadening learning and growth opportunities for young talents in the region.
Bruno: These trainees, we undergo a comprehensive AI training and become billable in the second half of the year.
Bruno: Our focus on attracting and developing hypertension individuals is vital to our ongoing success.
Bruno: By fostering a culture of innovation and continuous learning, we ensured that our teams are well equipped to drive value for our clients and contribute to our collective growth.
Bruno Guicardi: I'm excited to announce the launch of our 2024 Global OSU Report, which underscores our commitment to transparency and sustainable practice. As the video illustrated, we achieved significant milestones in 2024 that reflect our ongoing dedication to ESG principles. In addition, last year we introduced our new environmental policy and engaged 3,700 community members through our volunteer program.
Bruno: I'm excited to announce the launch of our 2024 Global ESG Report, which underscores our commitment to transparency and sustainable practices.
Bruno: As the video illustrated, we achieved significant milestones in 2024 that reflect our own going dedication to ESG principles.
Bruno: In addition, last year we introduced our new environmental policy and engaged 3700 community members through our volunteer programs. We're also proud of the third edition of the Black Leadership Career Acceleration Program which supports the development of professions of color. [inaudible]
Bruno Guicardi: We're also proud of the third edition of the Black Leadership Career Acceleration Program, which supports the development of professions of color. This report reaffirms our dedication to building a sustainable and innovative future. It highlights how we transform challenges into opportunities, creating value for both our business and society.
Bruno: This report reaffirms our dedication to building a sustainable and innovative future.
Bruno: It highlights how we transform challenges into opportunities, creamy value for both our business and society.
Bruno Guicardi: We invite you to explore the report and join us in our commitment to sustainability and inclusion.
Bruno: We invite you to explore the report and join us in our commitment to sustainability and inclusion.
Bruno Guicardi: Now let me share some insights into some of our services powered by Generative AI. One offer we see significant traction is in monetization of legacy. These platforms are holding clients back and preventing them from adapting quickly to an ever-changing business environment. By leveraging AI, we greatly reduce risks and errors while exponentially accelerating modernization.
Bruno: Now let me share some insights into some of our services powered by Generative AI.
Bruno: One offer we see significant traction is in modernization of legacy systems.
Bruno: These platforms are holding clients back and preventing them from adapting quickly to an ever-changing business environment.
Bruno: By leverage in AI, we greatly reduce risks in errors while exponentially accelerating modernization efforts.
Bruno Guicardi: Another key offering is our AI professional services. This program provides clients with a safe and compliant generative AI platform together with services to help them establish an adoption roadmap, training and coaching programs, ensuring they can fully scale AI across their organization, harnessing its potential while minimizing risk. We are also unlocking efficiency through AI-first Augmented Teams. This approach enhances productivity and delivers significant business outcomes. allowing our clients to operate with greater agility and effect.
Another key offering is our AI Professional Services.
Bruno: This program provides clients with a safe and compliant Gen. TVI platform to gather with services to help them establish an adoption roadmap, training and coaching programs, ensuring they can fully scare away eye across their organization, harnessing its potential while minimizing risks. [inaudible]
Bruno: We are also unlocking efficiency through AI-first augmented teams. This approach enhances productivity and delivers significant business outcomes.
allowing our clients to operate with greater agility and effectiveness.
Bruno: We are at the forefront of this transformation. We have industry leading aid eye adoption, with more than 85% of our employees already utilized in our AI-powered Sanctiflow platform daily to modernize systems, create agents, and drive tangible results for our clients. [inaudible]
Bruno Guicardi: We are at the forefront of this transformation. We have industry-leading AI adoption, with more than 85% of our employees already utilizing our AI-powered Ci&T flow platform daily to modernize systems, create agents, and drive tangible results for our.
Stanley Rodrigues: Now, I'd like to invite Stanley to share our financial results from this quarter. Thank you, Bruno, and good afternoon, everyone. In the first quarter of 2025, Ci&T achieved net revenue of $110.9 million, which represents a 4.9% increase compared to $105.7 million in the first quarter of 2024. When adjusted for currency fluctuations, our organic net revenue growth at constant currency was 13.7% year over year. This growth can be attributed to our focused internal initiatives aimed to enhancing client relationships and expanding our service offering. Our strategic emphasis on AI and digital transformation continues to drive new business opportunities and deepen engagements with our existing clients.
Bruno: Now, I'd like to invite Stanley to share our financial results from this quarter.
Thank you, Bruno, and good afternoon, everyone. Thank you, everyone.
Stanley: In the first quarter of 2025, Ci&T achieved net revenue of $110.9 million, which represents a 4.9% increase compared to $105.7 million in the first quarter of 2024.
Stanley: When adjusted for currency fluctuations, our organic net revenue growth at constant currency was 13.7% year over year.
Stanley: This growth can be attributed to our focused internal initiatives aimed to enhancing client relationships and expanding our service offering.
Stanley: Our strategic emphasis on AI and digital transformation continues to drive new business opportunities and deepen engagements with our existing clients.
Stanley Rodrigues: Now let's review our revenue breakdown by geography and industry verticals for the first quarter of 2025. Our two main markets reported healthy growth on a year-over-year basis. Revenue from Latin America grew by 11%, while revenue from North America increased by 12%. These figures highlight our strong presence and growth potential in key markets.
Stanley: Now let's review our revenue breakdown by geography and industry verticals for the first quarter of 2025.
Stanley: Our two main markets reported healthy growth on a year-over-year basis.
Stanley: Revenue from Latin America grew by 11% while revenue from North America increased by 12%. These figures highlight our strong presence and growth potential in key markets. [inaudible]
Stanley Rodrigues: In terms of industry verticals, revenue from financial services increased by 25% and retail and industrial goods grew by 32%. This performance reflects our strategic focus on industries that are prioritizing digital transformation and modernization. Notably, our top 10 clients' revenue grew by 7.2% compared to the first quarter of 2024. This robust performance illustrates the effectiveness of our proprietary Ci&T flow platform, which has proven instrumental in delivering innovative solutions that meet our clients' evolving needs. We have been successfully onboarding high-profile clients, showcasing our ability to expand our engagements with top-tier organizations. Our commitment to nurturing these relationships has led to significant revenue contributions from our top clients.
Stanley: In terms of industry verticals, revenue from financial services increased by 25% and retail and industrial goods grew by 32%.
Stanley: This performance reflects our strategic focus on industries that are prioritizing digital transformation and modernization. Notably, our top 10 clients revenue grew by 7.2% compared to the first quarter of 2024.
Stanley: This robust performance illustrates the effectiveness of our proprietary Ci&T flow platform, which has proven instrumental in delivering innovative solutions that meet our clients' evolving needs.
Stanley: We have been successfully onboarding high-profile clients, showcasing our ability to expand our engagements with top-tier organizations.
Stanley: Our commitment to nurturing these relationships has led to significant revenue contributions from our top clients.
Stanley Rodrigues: Currently, we have 10 clients generating over $10 million in revenue and 13 clients within the $5 to $10 million range. This robust performance demonstrates our effective lend and expand strategy, allowing us to deepen our partnerships and capture greater wallet share.
Stanley: 13 clients within the 5-10 million dollars range. This robust performance demonstrates our effective land-and-expand strategy, allowing us to deepen our partnerships and capture greater wallet share.
Stanley Rodrigues: In this quarter, we recorded an adjusted EBITDA of $19.6 million, which is a 15.2% increase compared to $17 million in the first quarter of 2024. The adjusted EBITDA margin improved to 17.6% in the first quarter of 2025, up from 16.1% in the same quarter last year. This improvement was primarily driven by lower selling general and administrative expenses, reflecting our ongoing commitment to operational efficiency and cost management. Importantly, cash generating from operating activities was $19.6 million in the first quarter of 2025, representing a 100% cash conversion from adjusted EBITDA into operating cash. This strong cash conversion highlights our ability to generate cash from our operations, providing us with the flexibility to invest in strategic initiatives and support our growth.
Stanley: In the squatter, we recorded an adjusted EBDA of $19.6 million, which is a 15.2% increase compared to $17 million in the first quarter of 2024.
Stanley: The adjusted Vita margin improved to 17.6% in the first quarter 25th up from 16.1% in the same quarter last year. This improvement was primarily driven by lower selling general and administrative expenses. [inaudible]
Reflecting our ongoing commitment to operational efficiency and cost management.
Stanley: Importantly, cash generating from operating activities was 19.6 million in the first quarter 25 representing a 100% cash conversion from Adjustedibida into operating cash. [inaudible]
Stanley: This strong cash conversion highlights our ability to generate cash from our operations, providing us with the flexibility to invest in strategic initiatives and support our growth.
Stanley Rodrigues: Adjusted net profit increased by 14.2% to $9.6 million in the first quarter 25, up from $8.4 million in the first quarter 24. The adjusted net profit margin rose to 8.7% in the first quarter 25, compared to 8% in the first quarter 24. This improvement was primarily driven by lower SG&A expenses along with reduced net finance costs. Our adjusted diluted earnings per share was 0.07 in the first quarter 25, marking a 16.6% increase from the previous year. This growth in adjusted diluted earnings per share demonstrates our ability to translate increased profits into shareholder value. Additionally, our free cash flow to adjusted net income ratio stood at an impressive 151.6%, underscoring our strong capacity to generate cash flow from our operations.
Stanley: Adjusted Net Profit increased by 14.2% to $9.6M in Q1 2025, up from $8.4M in Q1 2024.
Stanley: The adjusted net profit margin rose to 8.7% in the first quarter of 25 compared to 8% in the first quarter of 24. This improvement was primarily driven by lower SG&A expenses along with reduced net finance costs.
Stanley: Our adjusted diluted earnings per share was 0.07 in the first quarter 25, marking a 16.6% increase from the previous year. This growth in adjusted diluted earnings per share demonstrates our ability to translate increased profits into shareholder value.
Cesar Gon: Now, I invite Cesar back to comment on our business outlook. Thank you, Stanley. In the second quarter of 2025, we expect our reported net revenue to be at least US$115.5 million, equivalent to an 11.9% year-over-year increase on a constant-currency basis and 6.5% growth in reported revenue. This estimate assumes an average FX rate of 5.79 Brazilian Reais to the U.S. dollar in the second quarter of 2025, compared to 5.21 Brazilian Reais to the U.S. dollar in the second quarter of 2024.
Cesar Gon: Now, I invite Cesar back to comment on our business outlook.
Thank you, Stanley.
Cesar Gon: In the second quarter of 2025, we expect our reported net revenue to be at least US$115.5 million.
Cesar Gon: Equivalent to an 11.9% year-of-a-year increase on a constant current basis and 6.5% growth in reported revenue.
Cesar Gon: For the full year of 2025, we are reaffirming our guidance. We expect our net revenue growth at constant currents to be in the range of 90% to 15% year over year. In addition, we estimate our adjusted EBITDA margin to be in the range of 18% to 20%. This outlook is supported by a solid commercial pipeline, strong sales conversion, and the secure expansion of our top ten clients in our two largest markets, the US and Brazil, along with ramp ups of high potential new accounts.
Cesar Gon: For the full year of 2025, we are reaffirming your guidance.
Cesar Gon: We expect our natural revenue growth at constant curries to be in the range of 90% to 15% year-over-year. In addition, we estimate our just Ibnab Margin to be in the range of 18% to 20%.
This outlook is supported by a solid commercial pipeline.
Cesar Gon: strong sales conversion, and a secure expansion of our top ten clients in our two largest markets, the US and Brazil, along with ramp ups of high potential new accounts.
For more information visit www.casagrandeaz.gov
Cesar Gon: To conclude, I want to express my heartfelt appreciation for the dedication and resilience of our team. Your commitment to our vision has been truly inspiring.
Cesar Gon: To conclude, I want to express my heartfelt appreciation for the dedication and resilience of our team.
Your commitment to our vision has been truly inspiring.
Cesar Gon: As we look ahead, our ability to collaborate, innovate, and transform will continue to define Ci&T and drive our success.
Cesar Gon: As we look ahead, our ability to collaborate, innovate, and transform will continue to define CINT and drive our success.
Operator: This brings us to the end of our presentation, and we may now begin the Q&A session. Thank you.
Cesar Gon: This brings us to the end of our presentation, and we may now begin the Q&A session. Thank you.
Operator: [music] All right, we'll now begin the Q&A session. I'll announce each participant's name. Once you hear your name, please unmute your line and ask your question. Then, when you're done, please mute your line.
Speaker Change: All right, we'll now begin the Q&A session. I'll announce each participant's name. Once you hear your name, please unmute your line and ask your question. Then when you're done, please mute your line.
Vitor Tomita: The first question comes from Vitor Tomita from Gold Nossad. and Vitor. Hello, and thanks for taking our questions. Two questions from our side. The first one would be more on the, given all the further shift in macro perspectives globally, if you have any updates on how clients are feeling about IT investment, I guess, both in the US and in Brazil.
The first question comes from Vitor Tomita from Goldman Sachs.
I'll be told.
Speaker Change: Hello, and thanks for taking our questions. Two questions from our side. The first one would be...
Speaker Change: I guess both in the U.S. and in Brazil. And our second question would be on the solid year-and-year margin expansion on the squatter. You cited some S.G.N.A. efficiency initiatives that help it support that margin expansion if you could give us a bit more color on those. It would be great. Thank you. Thank you.
Cesar Gon: And our second question would be on the solid year-on-year margin expansion this quarter. You cited some SG&A efficiency initiatives that help and support that margin expansion.
Stanley Rodrigues: If you could give us a bit more color on those, it would be great. Thank you. Thank you, Vitor.
Speaker Change: Thank you, Victor. I can get the first one and Stanley can address the second. In terms of demand environment in the commercial activity,
Cesar Gon: I can get the first one and Stanley can can address the second. In terms of the demand environment in the commercial activity, I think the demand remains stable despite this ongoing macro uncertainty in all the regions we are playing, especially U.S. and Brazil. I think, as they always mention, stability continues to create a favor environment for our strategy of replacing underperforming competitors with our AI-driven solutions. Secondly, in terms of commercial activity, we have now a 30% higher commercial pipeline versus the same period last year. That allows us to be very confident in our growth.
I think the man remains stable.
DeSpayne
Speaker Change: There is ongoing macro uncertainty in all the regions we are playing, especially the U.S. and Brazil. I think, as they always mention, stability continues to create a favor environment for our strategy of replacing underperforming competitors with our AI-driven solutions.
Speaker Change: And secondly, in terms of commercial activity, we have now 30% higher commercial, a higher commercial pipeline versus the same period last year. That allows us to be very confident in our growth guidance.
Stanley Rodrigues: Stanley, can you get the margarita? Thank you for the question. Since last quarter, last year, first quarter last year, we had improved basically all the, basically we've maintained all the costs while the business grew significantly with regard to SG&A, which is your question. Also, in the first quarter last year, we had some costs related to restructuring and that they are not occurring this year. So, I would say mainly those two items in general terms are requiring this efficiency that you see in SG&A. Very clear. Thank you very much.
Stanley, can you get the margarita?
Rue, Significantly.
Speaker Change: with regard to SG&A, which is your question. Also, in the first quarter last year, we had some costs related to restructuring.
Speaker Change: and that they are not occurring this year. So I would say mainly those two items in general terms are recording this efficiency that you see in that journey.
Very clear. Thank you very much.
Operator: Our next, thank you, Vitor.
Speaker Change: Thank you, Vitor. Our next question comes from Gustavo Farias from UBS. Gustavo, go ahead.
Gustavo Farias: Our next question comes from Gustavo Farias from UBS. Gustavo, go ahead. Hi guys, thanks for taking my questions, two as well. So the first one, if you could comment on the demand side. I would like to double click and considering that you have delivered a bit on the guidance for Q1 in terms of constant currency growth. And also considering that results from tech peers in the U.S. mainly have come, let's say, less than a few years. Well, how can we? How do you see the demand? Is there any upside for growth considering the full year?
Gustavo Farias: Hi guys, thanks for taking my questions, two as well. So the first one, if you could comment on the demand side.
Speaker Change: I'd like to double click, and considering that you have delivered a bit on the guidance for Q1 in terms of constant currency growth.
Speaker Change: considering also that you are growing headcount, and you commented there is more to come in the second quarter.
and also considering that
results from attack peers.
Speaker Change: in the U.S., mainly, have come, let's say, in the last few years.
What the? How can we... [inaudible]
Speaker Change: How do you see the demand? Is there any upside for growth considering the full year? Is this year still considered a transition year for IT budgets in your vision? That's my first question.
Gustavo Farias: Is this year still considered a transition year for IT budgets in your vision? That's my first question.
Gustavo Farias: And the second question, if you could comment on, not the date as well, on the capital allocation priorities for the year. Do you see any M&As on the radar or R&D continues to be a priority for capital allocation? Thank you.
Speaker Change: And the second question, if you could comment on, not the date as well, on the capital allocation priorities for the year. Do you see any...
Speaker Change: M&A is on the radar or R&D continues to be a priority for Kapul occasion. Thank you.
Cesar Gon: Thank you, Gustavo. Let me let me start with your first questions. Yes, we also recognize a better environment and what I can say is that the high end of our our guidance assumes that we capitalize it with the curing commercial momentum, as I mentioned, our strong commercial pipeline and also client growth. claims that we are seeing. But the low end of our guidance reflects, let's say, a more prudent approach, given that we still see some macro volatility. And if I double-click, in the way I see the man, the overall... We continue to see a big trend regarding what we call horizontal demand.
Cesar Gon: Thank you, Gustavo. Let me start with your first questions. Yes, we also recognize a better
Gustavo Farias: environment and what I can say is that the high end of our our guidance
Gustavo Farias: So that we capitalized with the curing commercial momentum as a nation, our strong commercial pipeline, and also a client growth.
Gustavo Farias: trends we are seeing. But the low end of our guidance reflects, let's say, a more prudent approach, given that we still see some macro volatility.
Gustavo Farias: And if I double-click, in the way I see the man, the overall,
Gustavo Farias: We continue to see a big trend regarding what we call horizontal demand.
Cesar Gon: Maybe half of our, we can estimate half of our demand is basically legacy and application modernization, cloud migration, several data engagements where companies, our clients are preparing the foundation for a future AI-driven world. And we see a lot of trends also in what we call vertical demand, so improving customer experience. to engage new customers, really build new digital products. We also see what I can call the first wave of AI-first transformation programs, where we design a comprehensive program to help our clients to really accelerate their adoption of AI, and also a growing number of business use cases around AI and generative AI, focused especially on hyper-personalization.
Gustavo Farias: maybe half of our We can estimate half of our demand is basically
Gustavo Farias: legacy and application modernization, cloud migration, several data engagements where companies, our clients, are preparing the foundation for a future AI-driven world. And we see a lot of trends also in what we call vertical demand, so improving customer experience.
Gustavo Farias: to engage new customers, really build new digital products. We also see what I can call the first wave of AI-first transformation progress.
Gustavo Farias: where we design a comprehensive program to help our clients to really accelerate their adoption of AI and also a growing number of business use cases around AI and generative AI, focused especially on...
Cesar Gon: This is the way I see. I think it's. We are paying attention, we are capturing our pipeline, but still, I believe we still need to... consider that we have some macro. Starting to answer your second questions regarding capital allocation, yes, our priority is R&D in our AI-first transformation, so turning Ci&T and Ci&T Flow in our main drive for differentiations. And, but we also, of course, in terms of M&A, we continue to scan the market for opportunities, but I would like to mention that we are doing that with a very high bar. The reason for elevated, for this elevated threshold is clear.
Gustavo Farias: to consider that we have some macro volatility in our forecast and estimations.
Gustavo Farias: Starting to answer your second question regarding capital allocation, yes, our priority is R&D and our AI first.
transformations so turning CIT and CIT flow
Gustavo Farias: in our main drive for differentiations. And, but we also, of course, in terms of M&A, we continue to scan the market for opportunities, but I would like to mention that we are doing that with a very high bar.
Gustavo Farias: The reason for this elevated threshold is clear. Due to the AI disruption, many smaller companies are struggling to scale client relationships to the level required for meaningful AI transformation.
Cesar Gon: Due to the AI disruption, many smaller companies are struggling to scale client relationships to the level required for meaningful AI transformation. So, but with that in mind, our M&A folks continues to be on targets that can expand, especially our U.S. presence, bringing in high potential clients. And critically, we are looking for companies that offer the kind of client engagements where we can clearly see room for scaling Ci&T AI solutions. And that's a very.
Gustavo Farias: So, but with that in mind, our M&A folks continue to be on targets that can expand, especially our U.S. presence, bringing in high potential clients.
Gustavo Farias: And critically, we are looking for companies that offer the kind of client engagements where we can clearly see room for scaling CI and TDI solutions, and that's a very high bar.
Stanley Rodrigues: Stanley, if you want to add something. Well, besides R&D, as you already mentioned, I would add the share buyback program that we currently have in place. So as we envision this high cash generation that we see for 2025, we see that is always a good way to provide a return to shareholders via those share buybacks. that prevents also dilution from our stock-based compensations and so on. And also paying down debt. This is also, we've been executing all the debts, all the schedules for payments of our debt.
Stanley, if you want to add something...
Speaker Change: Well, besides R&D, as you already mentioned, I would add the share-by-back program that we currently have in place, so as we envision this high-cash generation that we see for 2025.
Speaker Change: We see that is always a good way to provide a return to shareholders via those share-by-backs.
Speaker Change: that prevents also dilution from our stock-based compensations and so on. And also, paying down debt. This is also, we've been executing all the debts, all the schedules for payments of our debts.
Gustavo Farias: Thanks, Cesar and Stanley. Thank you, Gustavo.
Thanks, Cesar and Stanley.
Thank you, Gustavo.
Brian Bergin: Our next question comes from Brian Bergin from TD Cowen. Brian, go ahead. Hey, guys, good to see you. Thanks for the time. First question on your top 10 clients. So I wanted to see if you could dig in more about the trends you're experiencing with some of your largest clients. So if we look at, you know, what you report in US dollars, obviously, that top client number is very impressive from a year over year growth standpoint. But if we think about just the overall top 10 client portfolio, is it possible to talk about what constant currency growth is there just so we can kind of separate some of the effects?
Brian Bergen: Our next question comes from Brian Bergen from TD Cowen. Brian, go ahead.
Hey guys, good to see you. Thanks for the time.
First question on on your top 10 clients so
Brian Bergen: I wanted to see if you could dig in more about the trends you're experiencing with some of your largest clients. So if we look at, you know, what you report in US dollars, obviously that top client number is very impressive from a year-over-year growth standpoint.
Brian Bergen: But if we think about just the overall top 10 client portfolio, is it possible to talk about what constant currency growth is there just so we can kind of separate some of the effects? And again, just give us some of the puts and takes about some of those close client relationships at the top.
Brian Bergin: And again, just give us some of the puts and takes about some of those close client relationships at the top. Thank you, Brian. Great to see you.
Thank you, Brian. Great to see you, man.
Cesar Gon: Well, first, I think, as you know, our first, our top one client is a very large financial service organization. So we are really expanding different business scenarios of this client, powered by CI&T Flow and our ability to demonstrate superior results across the board. So it's a very strong and long term relationship that we are enforcing now in boosting with AI.
Speaker Change: Well, first, I think, as you know, our top one client is a very large financial service organization. So we are...
really expanding different businesses in the areas.
of this
Speaker Change: clients, powered by CIT Flow and our ability to demonstrate superior results across the board, so it's a very strong
in boosting with AI. In terms of our...
Cesar Gon: In terms of our. top ten clients. I think if you exclude The top one, we still see a very strong growth among our one to nine clients. I think it's around 11%. Maybe Eduardo and Stanley can help me with this. So we are seeing the whole pack of large customers evolving, not only the top one, but of course, we are very happy with the trust and the evolution of our partnership. all of our players. the large and low dinner. Okay, okay.
Yeah
Speaker Change: the top one we still see a very strong growth among our one to nine
clients. I think there's around 11%.
all our clients, especially the large and low danger ones.
Okay.
Speaker Change: Okay, and then a follow up on Gen AI and client expectations and how that's evolving. So, you know, you mentioned, you know, hyper efficiency as one of the offerings you've leaned into most.
Brian Bergin: And then a follow-up on Gen AI and client expectations and how that's evolving. So, you mentioned hyper-efficiency as one of the offerings you've leaned into most. Can you just talk about productivity assumptions from clients and how much it is kind of a pull motion from them expecting this productivity versus how much is Ci&T pushing into the client base to obviously differentiate competitively? Talk about that dynamic.
Can you just talk about...
Speaker Change: It is kind of a pull motion from them expecting this productivity versus how much is CINT pushing into the client base to obviously differentiate competitively. So I've got that dynamic and I'm more so interested about more of the mature clients that are adopting and, you know, generate Gen AI solutions.
Cesar Gon: And I'm more so interested about more of the mature clients that are adopting and generate Gen AI solutions. I think it's... 100% Ci&T pushing for that. I think we anticipate that. I think we were very pioneers on creating Ci&T flow and launching our initiative. I think we are ahead of our peers in the average market in general for what we can see and what our clients are telling us. So I think by now we have a very concrete ways to showcase the numbers we are getting and the evolution of this productivity gains as we add more agents to our platform, as we reinvent the methodology of building digital solutions end-to-end, as we re-skill or we improve the skill of our teams to be AI-boosted teams. So it's 100% let's say pushed by Ci&T and the response from our clients is amazing.
I think it's...
Speaker Change: 100% CI&T pushing for that. I think we really anticipate that. I think we were very pioneers on creating CI&T flow and launching our initiative.
Speaker Change: I think we are ahead of our peers in the average market in general for what we can see and what our clients are telling us. So I think by now we have a very concrete...
ways to showcase the numbers.
Speaker Change: we are getting and the evolution of this productive game as we add more
agents to our platform as we reinvent
Speaker Change: The methodology of building digital solutions end-to-end as we re-skill or we improve the skill of our teams to be AI-boosted teams, so it's 100%
Let's say, pushed by CINT, and the response...
Speaker Change: response from our clients is amazing. I think that's why we are now starting what I mentioned, this AI-first transformation. It's kind of, we learn a lot in terms of how to convert
Cesar Gon: I think that's why we are now starting what I mentioned this AI-first transformation is kind of we learn a lot in terms of how to convert team, your AI-based team, how to. approach adoption of AI that is a non-trivial challenge. So by now we are helping our clients to start their journey with the learnings of our own two and a half years journey around AI. So I think it's an amazing moment where we can really support our clients, not only capturing productivity. Remember productivity or hyper-efficiency is just a chapter one. We still have customer experience in hyper-personalization and also the powerful act of revolutionizing decision-making in business models.
approach adoption of AI that is
to start their journey with the learnings of our own.
Speaker Change: two and a half years journey around AI. So I think it's an amazing moment where we can really support our clients.
Speaker Change: revolutionizing decision-making and business models. I think we are really moving in a very good pace and I think our our clients recognize that.
Brian Bergin: I think we are really moving in a very good pace and I think our our clients really Okay, okay.
Speaker Change: Okay, okay. If I could just fit one more in here on margin. So understanding you have seasonality in the first quarter, can you comment on gross margin expectations as you move through 2025?
Operator: If I could just fit one more in here on margin.
Operator: So understanding you have seasonality in the first quarter, can you comment on gross margin expectations as you move through 2025? Yes, I can.
Yes, I can, Brian, I can take that one.
Stanley Rodrigues: Ryan can take that one. Well, as you already mentioned, we have that seasonality, which is mainly with regard to the salary increase that we have in in the first quarter every year. And throughout the year, we we As we pass prices forward and et cetera, those margins will grow. So you should expect the same type of pattern that you saw in previous years.
Speaker Change: Well as you already mentioned we have that seasonality which is mainly with regard to the salary increase that we have in in the first quarter every year and throughout the year we we
Speaker Change: as we pass prices forward and etc this those margins will grow so you should expect the same type of pattern that you saw in previous years
Operator: Thank you all. Thank you, Brian.
Thank you all.
Speaker Change: Thank you, Brian. Our next question comes from Pune Jane from JP Morgan. Pune, go ahead.
Puneet Jain: Our next question comes from Puneet Jain from JP Morgan. Puneet, go ahead. Thank you, Puneet.
Pune Jane: Hey, thanks for taking my question. I also wanted to ask about this year, especially around the second half.
Pune Jane: of this fiscal year, like what's your visibility right now on second half and are you seeing any differences across US-based clients or Latin America-based clients, especially the clients you have in Brazil, like is there like any difference?
and behavior, spend patterns across those clients.
Speaker Change: Thank you, Puneer. I can start and maybe Bruno can add more colors regarding the U.S. market.
Cesar Gon: I can start and maybe Bruno can add more colors regarding the U.S. market. Our guidance is basically supported by what a nation, a very solid pipeline, so we have a strong visibility and we are considering our current very strong sales conversion. As a nation, pipeline now is 30% higher than the same period last year. We also consider a secure expansion in our pipeline clients as it's happening now. in both our largest market, the US and Brazil. And also, we are still leveraging ramp-ups in very high potential customers we acquired last year, where we are still increasing the demand between there.
Speaker Change: Our guidance is basically supported by a nation of very solid pipelines, so we have a strong visibility, and we are considering our current very strong sales conversion.
Speaker Change: As a nation, pipeline now is 30% higher than the same year last year.
Speaker Change: We also considered a secure expansion in our top 10 clients, as it's happening now.
Speaker Change: in both our largest market, the U.S. and Brazil, and also we are still leveraging Rambabs, a very high potential customer we acquired last year where we are still increasing the demand between there.
Bruno Guicardi: So I don't see any significant difference now between Brazil and the US.
Bruno Guicardi: and maybe Bruno Guicardi and Eduardo Galvao regarding specifically U.S. Thanks for your question, Puneet. Yeah, we're going to see a lot of differences in purchase patterns between US and Brazil at this point. We see, as Cesar kind of put in the previous question, we see the beginning of this new era of Gen AI. I think we're past the pilots and the exploration that was 2024. I think we see clients more confident moving forward and taking Gen AI to scale opportunities. And I think we're going to see this accelerating in the following years. It's just the beginning of a major revolution.
and maybe Brooke and Ed Guicardi, specifically U.S.
Thanks for your question, Puneet.
Speaker Change: Yeah, we're going to see a lot of differences in purchase patterns between the US and Brazil at this point.
Cesar Gon: We see, as Cesar kind of put in the previous question, we see like the beginning of this new era of Gen-AI. I think we're past the...
Cesar Gon: the pilots and the exploration that was 2024. I think we see clients, you know, more confident moving forward and taking GNI to a, you know, to scale.
opportunities so
Cesar Gon: And I think we're going to see this accelerating in the following years. It's just the beginning of a major revolution.
Bruno Guicardi: So again, to Cesar's point, I think we're very well positioned. We're uniquely positioned to capture that demand. We're ahead of the curve, way ahead of the pack in terms of what we're creating in terms of impact for clients and can prove that with stories, with real data, with real impact. And that kind of reflects in pipeline and a higher pipeline than 2024. And that's what gives us the confidence that we're going to get that growth.
Cesar Gon: And again, to Cesar's point, I think we're very well positioned, we're uniquely positioned to capture that demand, we're ahead of the curve, we're ahead of the pack in terms of what we're creating in terms of impact for clients and can...
Cesar Gon: can prove that with stories, with real data, with real impact. And, you know, that kind of reflects in pipeline, and a higher pipeline than 2024. That's what gives us the confidence.
that we're going to get that growth.
Puneet Jain: That's great, Kalar. And then on Gen AI, like, I totally understand that there is, like, so much opportunity that's ahead.
Speaker Change: That's great. And then on Gen AI, like I totally understand that there is like so much opportunity that's ahead. My question is like more like on the structural level, like why is that?
Cesar Gon: My question is, like, more, like, on, like, the structural level, like, why is that IT services companies will necessarily be beneficiaries of this opportunity compared to, like, the software companies or pure play private companies that are leading with, like, an AI platform? Like, what is it that companies like yourself, your peers bring to table that others can't in this evolving ecosystem? That's a great question, Puneet. That actually, we think that would be a great, you know, tailwind for us. Because if you look at the way... the buy versus build comparison today, right? It's cheaper to just go with one standardized solution that fits many clients, right?
Speaker Change: IT services companies will necessarily be beneficiaries of this opportunity compared to like the software companies or pure play private companies that are leading with like an AI platform. Like what is it that companies like yourself, your peers bring to table?
that others scanned in this evolving ecosystem.
Speaker Change: The buy versus build comparison today, right, it's cheaper to just go with one standardized solution that fits many clients.
Cesar Gon: So, but when productivity goals, you know, continues to improve exponentially, you know, building will be much cheaper. So what we predict and some analysts in the industry also agree with us, that will be a shift towards more custom software, right? So people, there's no reason why a client will be dependent on a package solution, a software provider and base their future into the hands of their provider, that ability to adapt and adjust to their needs when you can do it yourself, right? So we see that that will be a big tailwind for services companies, because more and more software will be just custom software, right, so that's what we're seeing.
Speaker Change: But when productivity goes, you know, continues to improve exponentially, you know, building will be much cheaper.
Speaker Change: and base their future into the hands of their provider, that ability to adapt and adjust to their needs.
Speaker Change: when you can do it yourself, right? So we see that that would be a big tailwind for services companies.
Speaker Change: because more and more software will be just custom software, right? So that's...
Speaker Change: That's where we're seeing some real case scenarios with our clients right now, like, you know, some they're analyzing, you know, build versus buy.
Cesar Gon: Some real case scenarios with our clients right now, like, you know, some they're analyzing, you know, build versus buy, and kind of when you factor in the productivity increases that are gonna have on the customer, on the custom software build side, you kind of conclude that that's the way to go for the future, and we think that will be a great, you know, source of demand for us going forward.
Speaker Change: and kind of when you factor in the productivity increases that we're going to have on the customer software build side, you kind of conclude that that's the way to go for the future. And I think that will be a great source of demand for us going forward.
Puneet Jain: Thank you. Thanks, Puneet.
Thank you.
Thank you. Thanks, Gonaire.
Maria Clara: Our next question comes from Maria Clara from Itaú.
Speaker Change: Our next question comes from Maria Clara from Itaú. Maria Clara, please go ahead.
Maria Clara: Maria Clara, please go ahead. Hi, everyone. Thanks for taking my question.
Maria Clara: Hi everyone, thanks for taking my question. I would like to ask you guys to better explore about the SG&A trends. This was the main positive surprise when we compared to our numbers.
Maria Clara: I would like to ask you guys to better explore about the SG&A trends. This was the main positive surprise when we compared to our numbers. Should we expect this space of operating leverage to be a reality throughout the year?
Speaker Change: Should we expect the space of operating leverage to be a reality throughout the year?
Stanley Rodrigues: If you could please comment about if the structural profitability of this business could be positively revised given the operating leverage they win, it would be very interesting to hear your opinion.
Speaker Change: If you could please comment about if the structural profitability of this business could be positively revised given the operating leverage they win, it would be very interesting to hear your opinion. Thank you so much.
Thank you very much.
Stanley Rodrigues: Maria Clara, thank you for your question. Well, SG&A, we, we've been operating a very stable platform, of course, let's say, or we don't expect growth, except by the S of SG&A, meaning we're investing on sales. So, for that portion, you would expect a growth throughout the year. But everything said, we are very in line to deliver what we are guiding in terms of EBITDA, 18 to 20%, so you shouldn't expect any tailwind, as you mentioned, to go above whatever we already guided the market, right? So, everything is already compounded into that number. And we, of course, from the operational side, we have been experiencing margin gains, small margin gains from AEI, I would say, in terms of coming from this efficiency that we are also taking advantage in the operation.
Maria Clara, thank you for your question.
Speaker Change: Well, SG&A, we've been operating in a very stable platform, of course, let's say, or we don't expect growth except by the S of SG&A, meaning we're investing on sales.
Speaker Change: So for that portion, you would expect a growth throughout the year.
But everything
Speaker Change: said we are very in line to deliver what we are guiding in terms of EBIDA, 18 to 20%.
Speaker Change: So you shouldn't expect any tailwind, as you mentioned, to go above whatever we already guided the market, right? So everything is already compounded into that number.
Speaker Change: And we, of course, from the operational side, we have been experiencing margin gains.
Speaker Change: small margin gains from AI I would say in terms coming from this efficiency that we are also taking the advantage in the operation so
Stanley Rodrigues: So, Some gross margin gains combined with that SG&A, as I mentioned, but at the same time, taking into consideration that we are investing in the growth side, meaning the sales, as I mentioned, and also in people. So all balanced, we are aiming for the EBITDA that you saw. So you have some ups and downs in the whole equation, but the EBITDA will translate everything.
gross margin gains combined with that.
Speaker Change: SG&A, as I mentioned, but at the same time, taking into consideration that we are investing.
Speaker Change: in the growth side, meaning the sales, as I mentioned, and also in people. So all balanced, we are aiming for the EBITDA that you saw. So you have some ups and downs in the whole equation, but the EBITDA will translate everything.
Maria Clara: Great. Very clear. Thank you.
Great. Very clear. Thank you.
Thank you.
Operator: Thank you, Clara.
Thank you, Clara.
Operator: That concludes our Q&A session.
Speaker Change: That concludes our Q&A session. I now invite Cesar to proceed with his closing remarks.
Cesar Gon: I now invite Cesar to proceed with his closing remarks. Cesar. Thanks, Galvao. Thank you, Bruno. And Stanley. Thank you all for joining us today.
Speaker Change: Thanks Galvao, thank you Bruno and Stanley. Thank you all for joining us today. I'd like to extend my Cesar appreciation for all CIMTers around the world for the dedication and accomplishments this quarter.
Cesar Gon: I'd like to extend my sincere appreciation for all CI&Ters around the world for the dedication and accomplishments this quarter. And a special thank you as well for our clients for choosing CI&T as a partner in co-creating this exciting new area of AI-driven innovation. Stay well.
Speaker Change: And a special thank you as well for our clients for choosing CIMG as a partner in co-creating this exciting new area of AI-driven innovation. Stay well, see you soon, bye.
See you soon.