Q1 2026 Ci&T Inc Earnings Call

May 11, 2026

[Company Representative] (CI&T): AI doesn't fix your SDLC. AI has reduced the cost of generating code to near zero, but the bottleneck didn't disappear. It moved from writing code to deciding whether code is ready to move. We introduced agentic SDLC by drawing on our deep knowledge of software engineering and operational efficiency. This framework represents a fundamental shift in software delivery, prioritizing decision-making over task completion to maintain momentum. Decisions are propagated through an orchestration layer that connects humans, agents, tools, and shared context. The transformation unfolds across three stages of maturity: augmentation, where AI accelerates individual tasks, coordination, where agents connect across stages, and autonomy, where the life cycle itself is redesigned. Reported gains of 2, 5, and up to 20 times, not from faster tasks, but from a system that stops waiting.

[Company Representative] (CI&T): AI doesn't fix your SDLC. AI has reduced the cost of generating code to near zero, but the bottleneck didn't disappear. It moved from writing code to deciding whether code is ready to move. We introduced agentic SDLC by drawing on our deep knowledge of software engineering and operational efficiency. This framework represents a fundamental shift in software delivery, prioritizing decision-making over task completion to maintain momentum. Decisions are propagated through an orchestration layer that connects humans, agents, tools, and shared context. The transformation unfolds across three stages of maturity: augmentation, where AI accelerates individual tasks, coordination, where agents connect across stages, and autonomy, where the life cycle itself is redesigned. Reported gains of 2, 5, and up to 20x, not from faster tasks, but from a system that stops waiting.

Speaker #1: AI doesn't fix your SDLC. AI has reduced the cost of generating code to near zero. But the bottleneck didn't writing code to deciding whether code is "ready" to introduced Agentic SDLC by drawing on our deep knowledge of efficiency.

Speaker #1: Software engineering and operational—this framework represents a fundamental shift in software delivery, prioritizing decision-making over task completion to maintain momentum. Decisions are propagated through an orchestration layer that connects humans, agents, tools, and shared context.

Speaker #1: The transformation unfolds across three stages of maturity: augmentation, where AI accelerates individual tasks; coordination, where agents connect across stages; and autonomy, where the lifecycle itself is redesigned.

Speaker #1: Reported gains of 2, 5, and up to 20 times not from faster tasks, but from a system that stops waiting. The organizations that lead in this period will not be those that generate the most code.

[Company Representative] (CI&T): The organizations that lead in this period will not be those that generate the most code, but those that orchestrate the system best with trust and decision criteria. Explore the full paper online.

Speaker #1: But those that orchestrate the system best, with trust and decision criteria. Explore the full paper online.

Speaker #2: Good afternoon, and thank you for joining us for CI&T First Quarter of 2026 Earnings Call. I am Eduardo Galvão, Director of Investor Relations. Joining me today to discuss our results and strategic milestones are Cesar Gon, our founder and CEO; Bruno Guicardi, founder and president for North America and Europe; and Stanley Rodrigues, our CFO.

Eduardo Galvão: Good afternoon. Thank you for joining us for CI&T Q1 2026 Earnings Call. I am Eduardo Galvão, Director of Investor Relations. Joining me today to discuss our results and strategic milestones are Cesar Gon, our Founder and CEO, Bruno Guicardi, Founder and President for North America and Europe, and Stanley Rodrigues, our CFO. Before we begin, I would like to remind you that our remarks today will include forward-looking statements. These statements, including our business outlook, are based on the management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. We caution you not to place undue reliance on these forward-looking statements as they're valid only as of the date when made. Additionally, we'll discuss certain non-GAAP financial measures. We believe these provide a more comprehensive view of our underlying operational performance.

Speaker #2: Before we begin, I would like to remind you that our remarks today will include forward-looking statements. These statements include our business outlook, are based on the management's current expectations, and are subject to risks and uncertainties that could cause actual results to defer materially.

Speaker #2: We caution you not to place undue reliance on these forward-looking statements, as they are valid only as of the date when made. Additionally, we'll discuss certain known gap financial measures.

Speaker #2: We believe these provide a more comprehensive view of our underlying operational performance. For a full reconciliation of these measures to the most directly comparable GAAP metrics, please refer to the tables in our earnings release.

Eduardo Galvão: For a full reconciliation of these measures to the most directly comparable GAAP metrics, please refer to the tables in our earnings release. Today's session is being recorded, and all participants are currently in a listen-only mode. Following our presentation, we'll host a Q&A session. To participate, please submit your question via email to investors@cint.com. The full presentation deck is available on our investor relations website, and a replay of this call will be posted shortly after we conclude. With that, I'm pleased to hand the floor over to our Founder and CEO, Cesar Gon.

Speaker #2: Today's session is being recorded, and all participants are currently in a listen-only mode. Following our presentation, we'll host a Q&A session. To participate, please submit your question via email to investors@cint.com.

Speaker #2: The full presentation deck is available on our investor relations website, and a replay of this call will be posted shortly after we conclude. With that, I'm pleased to hand the floor over to our founder and CEO, Cesar Gon.

Speaker #3: Thank you, Eduardo, and good day, everyone. A year ago, I said the future of business is technology, and the future of technology is business.

Cesar Gon: Thank you, Eduardo Galvão, Good day, everyone. A year ago, I said the future of business is technology, and the future of technology is business. 6 consecutive quarters of double-digit organic growth tell me that bet was right. What has changed is the kind of partner companies are looking for, not a traditional horizontal service firm, but what we are choosing to call tech-integrated business solutions partner. We continue to advance two distinct AI-driven growth vectors for CI&T. AI deployment, with expanding revenue through IP-based solutions and AI adoption engagements, and AI monetization, with expand margins by evolving our pricing models to capture a greater share of the productivity gains and business value created by AI. 2025 was a very strong year for AI deployment, and this trend has only strengthened in 2026.

Cesar Gon: Thank you, Eduardo Galvão, Good day, everyone. A year ago, I said the future of business is technology, and the future of technology is business. six consecutive quarters of double-digit organic growth tell me that bet was right. What has changed is the kind of partner companies are looking for, not a traditional horizontal service firm, but what we are choosing to call tech-integrated business solutions partner. We continue to advance two distinct AI-driven growth vectors for CI&T. AI deployment, with expanding revenue through IP-based solutions and AI adoption engagements, and AI monetization, with expand margins by evolving our pricing models to capture a greater share of the productivity gains and business value created by AI. 2025 was a very strong year for AI deployment, and this trend has only strengthened in 2026.

Speaker #3: Six consecutive quarters of double-digit organic growth tell me that that was right. What exchanges—the kind of partner companies are looking for—not a traditional horizontal service firm, but what we are choosing to call a tech-integrated business solutions partner.

Speaker #3: We continue to advance two distinct AI-driven growth vectors for CI&T: AI deployment, with expanded revenue through IP-based solutions and AI adoption engagements; and AI monetization, with expanded margins by evolving our pricing models to capture a greater share of the productivity gains and business value created by AI.

Speaker #3: 2025 was a very strong year for AI deployment, and this trend has only strengthened in 2026. At the same time, 2026 marks the year when our AI monetization efforts are becoming more tangible.

Cesar Gon: At the same time, 2026 marks the year when our AI monetization efforts are becoming more tangible. In Q1 2026, 20% of new sales were already based on new pricing models. We expect these models to contribute to gross margin expansion over the coming quarters as adoption continues to accelerate. By combining strategy, AI native execution with agentic SDLC and IP-based solutions, we are positioning CI&T to help lead the next decade of business reinvention. Turning to our financial performance, Q1 2026 was a period of significant scale and sustained momentum. We achieved record revenue of $136.6 million, representing 23.2% year-over-year organic growth. This outperformance is notably broad-based with robust demand across all core geographies and a diversified footprint spanning our key industry verticals.

Speaker #3: In Q1 2026, 20% of new sales were already based on new pricing models, we expect these models to contribute to gross margin expansion over the coming quarters as adoption continues to accelerate.

Speaker #3: By combining strategy, AI-native execution with agentic SDLC, and IP-based solutions, we are positioning CI&T to help lead the next decade of business reinvention. Turning to our financial performance, the first quarter of 2026 was a period of significant scale and sustained momentum.

Speaker #3: We achieved record revenue of $136.6 million representing 23.2 year-over-year organic growth. This outperformance is notably broad-based, with robust demand across all core geographies and a diversified footprint spanning our key industry verticals.

Speaker #3: Profitability remained a core EBITDA reaching $20.8 million, representing a 15.2% margin. On an FX-neutral basis, this would be equivalent to an adjusted EBITDA margin of 17.4%.

Cesar Gon: Profitability remains a core strength of our model, with adjusted EBITDA reaching $20.8 million, representing a 15.2% margin. On an FX neutral basis, this would be equivalent to an adjusted EBITDA margin of 17.4%. This performance reflects our ability to continue investing in our AI growth vectors while maintaining a disciplined operational profile. Furthermore, our business continues to demonstrate high quality cash conversion with $13.5 million in cash operating cash flow this quarter, equivalent to 65% of adjusted EBITDA. The first quarter of 2026 marked our 60th consecutive quarter of double-digit organic growth, and this growth remains fully organic. This consistency is not accidental. It reflects a structural shift in client demand and CI&T's ability to capture it. We are now seeing a clear acceleration of AI deployment.

Speaker #3: This performance reflects our ability to continue investing in our AI growth vectors, while maintaining a disciplined operational profile. Furthermore, our business continues to demonstrate high-quality cash conversion, with $13.5 million in operating cash flow this quarter, equivalent to 65% of adjusted EBITDA.

Speaker #3: The first quarter of 2026 marked our 60th consecutive quarter of double-digit organic growth. And this growth remains fully organic. This consistency is not accidental.

Speaker #3: It reflects a structural shift in client demand and CI&T's ability to capture it. We are now seeing a clear acceleration of AI deployment. Clients are moving beyond experimentation and beginning to rebuild their technology foundations, operating models, and business processes around AI.

Cesar Gon: Clients are moving beyond experimentation and beginning to rebuild their technology foundations, operating models, and business processes around AI. They need partners capable of connecting strategy, execution, and measurable outcomes in the complex reality of large enterprise environments. This is where CI&T is increasingly differentiated. Our proprietary IP, AI native delivery capabilities, and CI&T Flow are helping us convert this demand into large, higher quality engagements, both with new clients and within existing accounts. The case studies that follow show how this AI deployment momentum is translating into tangible business outcomes.

Speaker #3: They need partners capable of connecting strategy, execution, and measurable outcomes in the complex reality of large enterprise environments. This is where CI&T is increasingly differentiated.

Speaker #3: Our proprietary IP, AI-native delivery capabilities, and CI&T Flow are helping us convert this demand into large, higher-quality engagements, both with new clients and within existing accounts.

Speaker #3: The case studies that follow show how this AI deployment momentum is translating into tangible business outcomes.

Speaker #1: One of the world's largest healthcare companies, pharmaceuticals, medical devices, global scale. The challenge was simple to state and hard to deliver. Unlock value faster without growing the team, without expanding the budget.

[Company Representative] (CI&T): One of the world's largest healthcare companies, pharmaceuticals, medical devices, global scale. The challenge was simple to state and hard to deliver. Unlock value faster without growing the team, without expanding the budget. We didn't add people. We didn't increase spend. We changed the model. The introduction of CI&T's agentic SDLC marked a turning point for the client. AI-based agents plus human in the loop equals sharper judgment. Excellence at every step. Now, CI&T's agentic SDLC is already delivering 5 times faster. AI designs and codes, humans orchestrate and validate. Next, 20 times faster. Not a pilot, a production system. This is the power of the agentic SDLC. Software delivery on a new cadence running inside one of the world's largest healthcare companies, built with us. The future starts Monday.

Speaker #1: We didn't add people. We didn't increase spend. We changed the model. The introduction of CI&T's agentic SDLC marked a turning point for the client.

Speaker #1: AI-based agents, plus human-in-the-loop, equals sharper judgment. Excellence at every step. Now, CI&T's agentic SDLC is already delivering five times faster AI designs and codes, humans orchestrate and validate.

Speaker #1: Next, 20 times faster. Not a pilot, a production system. This is the power of the agentic SDLC. Software delivery on a new cadence. Running inside one of the world's largest healthcare companies, built with us.

Speaker #1: The future starts Monday.

Speaker #2: In digital credit, growth is mandatory. Scaling with consistency—that's the real interest rate. Jado migrated to Flutter, launched on iOS, and wired AI into the development workflow with CI&T.

[Company Representative] (CI&T): In digital credit, growth is mandatory. Scaling with consistency, that's the real interest rate. Jado migrated to Flutter, launched on iOS, and wired AI into the development workflow with CI&T. Productivity up 87%. Development time down 44%. Cycle time, 15 days flat. AI isn't a feature Jado added. It's the new credit line running through the code.

Speaker #2: Productivity up 87%. Development time down 44%. Cycle time 15 days flat. AI isn't a feature Jado added. It's the new credit line running through the code.

Speaker #3: AI first. Happens where speed, scale, and judgment finally move together. YouDux rewrote how its learning hubs run. Software development through AI allows teams to move beyond manual tasks and focus on higher-level strategic thinking.

[Company Representative] (CI&T): AI first happens where speed, scale, and judgment finally move together. Udux rewrote how its learning hubs run. Software development through AI allows teams to move beyond manual tasks and focus on higher level strategic thinking. AI workflows wired in, audit ready, always on. A feature once scoped for a month shipped in a week. Productivity didn't inch up, it multiplied five times during the initial phase and reached seven times in the subsequent wave. Because in education, the best lessons aren't taught, they're engineered with the right partner.

Speaker #3: AI workflows wired in. Audit ready. Always on. A feature once scoped for a month shipped in a week. Productivity didn't inch up—it multiplied.

Speaker #3: Five times during the initial phase, and reached seven times in the subsequent wave. Because in education, the best lessons aren't taught—they're engineered. With the right partner.

Speaker #1: We are recognized as a sustainable supplier by Porto. This is the result of a real collaboration. And shared accountability. Strengthening an entire ecosystem. Not just a business relationship.

[Company Representative] (CI&T): We are recognized as a sustainable supplier by Porto. This is the result of a real collaboration and shared accountability, strengthening an entire ecosystem, not just a business relationship. Our ESG journey is continuous and firmly aligned with the UN Global Compact. At CI&T, sustainability isn't a future ambition. It's a decision we make today.

Speaker #1: Our ESG journey is continuous and firmly aligned with the UN Global Compact. At CI&T, sustainability isn't a future ambition. It's a decision we make today.

Speaker #4: AI is already in the checkout line. But according to our latest retail tech reality check, most consumers aren't yet impressed by the experience. To explore the story behind the data, Melissa Minkow, our global director of strategy and insights, sat down with the UK's leading retail press in London including the BBC Retail Week and City AM to unpack the findings.

[Company Representative] (CI&T): AI is already in the checkout line. According to our latest retail tech reality check, most consumers aren't yet impressed by the experience. To explore the story behind the data, Melissa Minkow, our Global Director of Strategy and Insights.

Stanley Rodrigues: Sat down with the UK's leading retail press in London, including the BBC, Retail Week, and City AM to unpack the findings. The takeaway? AI isn't on the horizon. It's already in the cart. For retailers, the real work of winning over the customer has only just begun. We are around the clock across time zones with the partners shaping what comes next. São Paulo, Adobe Partner Day, aligning priorities for the year ahead. Still in São Paulo, Adobe AI Forum, AI in action with our clients side by side. Many places in Brazil, industry conversations driving data and AI forward. Las Vegas, Databricks Partner Kickoff, connecting globally. With AWS Kickoff 2026, Gen AI workshops working backwards sessions from strategy to execution. With Microsoft AI Tour, summits, training, and scaling AI across markets. Different places, same direction. Innovation only matters when it delivers real impact.

[Company Representative] (CI&T): Sat down with the UK's leading retail press in London, including the BBC, Retail Week, and City AM to unpack the findings. The takeaway? AI isn't on the horizon. It's already in the cart. For retailers, the real work of winning over the customer has only just begun. We are around the clock across time zones with the partners shaping what comes next. São Paulo, Adobe Partner Day, aligning priorities for the year ahead. Still in São Paulo, Adobe AI Forum, AI in action with our clients side by side. Many places in Brazil, industry conversations driving data and AI forward. Las Vegas, Databricks Partner Kickoff, connecting globally. With AWS Kickoff 2026, Gen AI workshops working backwards sessions from strategy to execution. With Microsoft AI Tour, summits, training, and scaling AI across markets. Different places, same direction. Innovation only matters when it delivers real impact.

Speaker #4: The takeaway? AI isn't on the horizon—it's already in the cart. But for retailers, the real work of winning over the customer has only just begun.

Speaker #1: We are around the clock, across time zones, with the partners shaping what comes next. São Paulo, Adobe Partner Day, aligning priorities for the year ahead.

Speaker #1: Still in São Paulo, Adobe AI Forum. AI in action with our clients, side by side. Many places in Brazil. Industry conversations driving data and AI forward.

Speaker #1: Las Vegas. Data Bricks partner kickoff. Connecting globally. With AWS Kickoff 2026, GenAI workshops working backward sessions from strategy to execution. With Microsoft, AI Tour.

Speaker #1: Summits, training, scaling AI across markets. Different places, same direction.

Speaker #4: Innovation only matters when it delivers real impact. That's what the IT Forum 100+ Most Innovative Companies ranking recognizes: organizations that turn strategy into execution.

Stanley Rodrigues: That's what the IT Forum 100+ Most Innovative Companies ranking recognizes organizations that turn strategy into execution. We are proud to be among them. Let's keep talking about recognitions. We are also proud to be named the 2026 Google Cloud Partner of the Year for databases in Latin America, recognizing how we mix strategy, data engineering, and analytics to make that transformation real. We will be always connecting AI, data, and engineering to real business challenges and making it work where it matters most, inside our clients' operations.

[Company Representative] (CI&T): That's what the IT Forum 100+ Most Innovative Companies ranking recognizes organizations that turn strategy into execution. We are proud to be among them. Let's keep talking about recognitions. We are also proud to be named the 2026 Google Cloud Partner of the Year for databases in Latin America, recognizing how we mix strategy, data engineering, and analytics to make that transformation real. We will be always connecting AI, data, and engineering to real business challenges and making it work where it matters most, inside our clients' operations.

Speaker #4: We are proud to be among them. Let's keep talking about recognitions. We are also proud to be named the 2026 Google Cloud Partner of the Year for Databases in Latin America.

Speaker #4: Recognizing how we mix strategy, data engineering, and analytics to make that transformation real. We will be always connecting AI, data, and engineering to real business challenges.

Speaker #4: And making it work where it matters most: inside our clients' operations.

Cesar Gon: These cases serve as empirical evidence of how our agentic SDLC is fundamentally resetting the baseline for enterprise productivity and speed to value. I will now hand over to Bruno to discuss how we are scaling this hyperproductivity to our global delivery model and our evolved talent strategy.

Speaker #5: These cases serve as empirical evidence of how our agentic SDLCs fundamentally resetting the baseline for enterprise productivity and speed to value. I will now hand over to Bruno to discuss how we are scaling this hyper-productivity to our global delivery model.

Speaker #5: And our evolved talented strategy.

Speaker #6: Thanks, Cesar. Good afternoon, everyone. I'm excited to share our operational and talent progress for this quarter. We ended the first quarter 2026 with over 8,000 professionals, including an average of 6,600 AI builders.

Bruno Guicardi: Thanks, Cesar. Good afternoon, everyone. I'm excited to share our operational and talent progress for this quarter. We ended Q1 2026 with over 8,000 professionals, including an average of 6,600 AI builders. Our headcount increased 13.3% year over year, this remained below our 15.5% revenue growth at constant currency. This delta has already begun lifting our revenue per professional, we expect it to widen as AI monetization scales. Value-based pricing let us capture more of the value we create per engagement, strengthening our unit economics as we continue to grow the team. As Cesar noted, we have pivoted from technology execution to strategic AI deployment. Our talent is no longer merely building code. They are curators of AI, leveraging CI&T Flow and the agentic SDLC to collapse development times and deliver hyperproductivity.

Speaker #6: While our headcount increased 13.3% year over year, this remained below our 15.5% revenue growth at constant currents. This delta has already begun lifting our revenue per professional, and we expect it to widen as AI monetization scales.

Speaker #6: Value-based pricing let us capture more of the value we create per engagement, strengthening our unit economics as we continue to grow the team. As Cesar noted, we have pivoted from technology execution to strategic AI deployment.

Speaker #6: Our talent is no longer merely building code. They are curators of AI, leveraging CI&T Flow and the agentic SDLC to collapse development times and deliver hyper-productivity.

Speaker #6: This shift is only possible because of our culture of continuous adaptation. We ended the quarter with a 4.1 glass door score. The highest among our peer group.

Bruno Guicardi: This shift is only possible because of our culture of continuous adaptation. We ended the quarter with a 4.1 Glassdoor score, the highest among our peer group, and having been recognized by Great Place to Work for 19 consecutive years. Our voluntary attrition remains at a healthy 10.3%, the lowest level in our recent history. In an era where AI is redefining technical careers, our industry-leading rotation proves that our people feel empowered by these tools, not replaced by them. Our AI builders are the engine of our innovation, and their ability to orchestrate complex AI agents is the fundamental differentiator for CI&T in the global market. I'm proud to announce the launch of our 2025 global ESG report this quarter, reaffirming our commitment to the UN Global Compact.

Speaker #6: And having been recognized by Great Place to Work for 19 consecutive years. Our voluntary attrition remains at a healthy 10.3%, the lowest level in our recent history.

Speaker #6: In an era where AI is redefining technical careers, our industry-leading rotation proves that our people feel empowered by these tools, not replaced by them.

Speaker #6: Our AI builders are the engine of our innovation. And their ability to orchestrate complex AI agents is the fundamental differentiator for CI&T in the global market.

Speaker #6: I'm proud to announce the launch of our 2025 Global ESG Report this quarter, reaffirming our commitment to the UN Global Compact. Our culture remains a primary competitive advantage.

Bruno Guicardi: Our culture remains a primary competitive advantage. 52.2% of our global workforce is from underrepresented groups. The diversity of perspective is what allows us to navigate the ethical complexity of AI responsibly. It's not separate from the business. It's why clients trust us with their work. The report also covers our social impact. Over 100,000 people reached through funded projects alongside governance and environmental milestones, including the Gold Seal from the Brazil GHG Protocol and 100% renewable energy across our Brazilian operations. I invite you to explore the full report published on our website. Now, over to Stanley to guide us through our financial performance.

Speaker #6: And 52.2% of our global workforce is from underrepresented groups. The diversity of perspective is what allows us to navigate the ethical complexity of AI responsibly.

Speaker #6: It's not separate from the business. It's why clients trust us with their work. The report also covers our social impact. Over 100,000 people reached it through funded projects.

Speaker #6: Alongside governance and environmental milestones. Including the Golden Seal from the Brazil GHG Protocol and 100% renewable energy across our Brazilian operations. I invite you to explore the full report published on our website.

Speaker #6: Now, over to Stanley to guide us through our financial performance.

Speaker #5: Thank you, Bruno. And good afternoon, everyone. Let me walk you through our financial performance for the first quarter of 2026. We achieved $136.6 million in net revenue, representing a robust 23.2% growth compared to the same period last year, fully organic.

Stanley Rodrigues: Thank you, Bruno, and good afternoon, everyone. Let me walk you through our financial performance for Q1 2026. We achieved BRL 136.6 million in net revenue, representing a robust 23.2% growth compared to the same period last year, fully organic. On a constant currency basis, revenue grew 15.5% year over year. I want to highlight that this performance exceeded our guidance and surpassed current analyst estimates. This outperformance is underpinned by exceptional momentum in our go-to-market execution. Throughout the quarter, we observed a significant expansion in our sales pipeline and an improved conversion rate.

Speaker #5: On a constant currency basis, revenue grew 15.5% year over year. I want to highlight that this performance exceeded our guidance and surpassed current analyst estimates.

Speaker #5: This outperformance is underpinned by exceptional momentum in our go-to-market execution. Throughout the quarter, we observed a significant expansion in our sales pipeline and an improved conversion rate, the direct result of intentional sales initiatives and the tangible impact our AI deployment is delivering for our clients.

Stanley Rodrigues: The direct result of intentional sales initiatives and the tangible impact our AI deployment is delivering for our clients. What excites us most is the underlying quality and breadth of this performance. From a geographic perspective, Latin America led the acceleration with 33% growth, while North America delivered a solid increase of 16%, and new markets grew 11% year-over-year. We achieved an 18.9% expansion within our top 10 accounts, yet our growth remains healthily distributed. This resilience was visible across nearly all industry verticals, which grew at double digits, with our consumer goods segment remaining stable. This broad-based performance confirms that our AI deployment is not a localized success. It is a global catalyst that is driving deeper penetration across all regions and industries we serve. This chart illustrates our land and expand strategy in action.

Speaker #5: What excites us most is the underlying quality and breadth of this performance. From a geographic perspective, Latin America led the acceleration with 33% growth, while North America delivered a solid increase of 16%.

Speaker #5: And new markets grew 11% year over year. We achieved an 18.9% expansion within our top 10 accounts, yet our growth remains healthily distributed. This resilience was visible across nearly all industry verticals, which grew at double digits.

Speaker #5: With our consumer goods segment remaining stable. This broad-based performance confirms that our AI deployment is not a localized success. It is a global catalyst that is driving deeper penetration across all regions and industries we serve.

Speaker #5: This chart illustrates our land and expand strategy in action. We grew our $5 to $10 million client cohort from 15 to 18 clients in the quarter, a compounding effect of our ability to scale wallet share through AI-driven impact.

Stanley Rodrigues: We grew our 5 to 10 million client cohort from 15 to 18 clients in the quarter, a compounding effect of our ability to scale wallet share through AI-driven impact. Our performance is fueled by exceptional go-to-market momentum. We observed significant pipeline expansion and improved conversion rates this quarter, the direct result of intentional sales initiatives and the tangible return on investments our AI deployment provides. This strength creates a highly predictable and resilient revenue base as we deepen these strategic partnerships. In Q1 2026, our adjusted EBITDA reached BRL 20.8 million, a 6.3% increase year-over-year, resulting in a 15.2% margin. It is important to note that this margin reflects two specific headwinds, unfavorable foreign exchange comparisons, and the impact of increased Brazilian payroll taxes.

Speaker #5: Our performance is fueled by exceptional go-to-market momentum. We observed significant pipeline expansion and improved conversion rates this quarter, the direct result of intentional sales initiatives and the tangible return on investments our AI deployment provides.

Speaker #5: This strength creates a highly predictable and resilient revenue base as we. Deepen this strategic partnerships. In the first quarter of 2026, our adjusted EBITDA reached 20.8 million, a 6.3% increase year over year, resulting in a 15.2% margin.

Speaker #5: It is important to note that this margin reflects two specific headwinds: unfavorable foreign exchange comparisons and the impact of increased Brazilian payroll taxes. To provide a clearer view of our operational performance, if we exclude these effects, our first quarter 2026 EBITDA would have reached $22.2 million, equivalent to a 17.4% margin and a robust 13.2% year-over-year growth.

Stanley Rodrigues: To provide a clearer view of our operational performance, if we exclude the effects impact, our Q1 2026 EBITDA would have reached BRL 22.2 million, equivalent to a 17.4% margin and a robust 13.2% year-over-year growth. This FX impact was more pronounced in the Q1 due to the year-over-year Brazilian reais/USD comparison base, and it is expected to attenuate over the coming quarters. We remain focused on ensuring that the hyperproductivity we are engineering today becomes the permanent foundation for long-term sustainable profitability. As Cesar mentioned, we expect our new engagement models to contribute to profitability margin expansion over the coming quarters as adoption continues to accelerate, and we capture a greater share of the value we create. Moving to our bottom line, adjusted profit reached BRL 10.2 million in the Q1 of 2026.

Speaker #5: This effect's impact was more pronounced in the first quarter due to the year-over-year Brazilian realized US dollar comparison base, and it is expected to attenuate over the coming quarters.

Speaker #5: We remain focused on ensuring that the hyper-productivity we are engineering today becomes the permanent foundation for long-term sustainable profitability. As Cesar mentioned, we expect our new engagement models to contribute to profitability margin expansion over the coming quarters, as adoption continues to accelerate and we capture a greater share of the value we create.

Speaker #5: Moving to our bottom line, adjusted profit reached 10.2 million in the first quarter of 2026. This represents a 6.2% increase compared to the same period last year, resulting in an adjusted net income margin of 7.5%.

Stanley Rodrigues: This represents a 6.2% increase compared to the same period last year, resulting in an adjusted net income margin of 7.5%. Most importantly, our adjusted diluted earnings per share was $0.08, representing a robust 11.8% increase over Q1 2025. This double-digit growth in earnings per share, surpassing our net profit growth, is a direct result of our disciplined capital allocation strategy and the increasing operating leverage within our AI-native platform. I will now turn the call back to Cesar to discuss our business outlook and the strategic path forward for the remainder of 2026.

Speaker #5: Most importantly, our adjusted diluted earnings per share was 8 cents, representing a robust 11.8% increase over first quarter 2025. This double-digit growth in earnings per share surpassing our net profit growth is a direct result of our disciplined capital allocation strategy and the increasing operating leverage within our AI-native platform.

Speaker #5: I will now turn the call back to Cesar to discuss our business outlook and the strategic path forward for the remainder of 2026.

Cesar Gon: Thank you, Stanley. For Q2 2026, we expect revenue of at least BRL 140 million, representing 19.5% growth year over year or 13.9% at constant currency. Based on our strong Q1 performance and the quality of our current pipeline, we are increasing our full year 2026 revenue guidance to a range of BRL 556 to 575 million. This implies organic growth of 13.5% to 17.5% with a midpoint of 15.5%. Our revised growth outlook includes a positive effects impact of approximately 350 basis points, which is 50 basis points higher than our previous guidance.

Speaker #1: Thank you, Stanley. For the second quarter of 2026, we expect revenue of at least 140 million dollars, representing 19.5% growth year over year, or 13.9% at constant currency.

Speaker #1: Based on our strong first quarter performance and the quality of our current pipeline, we are increasing our full-year 2026 revenue guidance to a range of 556 million to 575 million dollars.

Speaker #1: This implies our gaining growth of 13.5% to 17.5%, with a midpoint of 15.5%. Our revised growth outlook includes a positive effects impact of approximately 350 basis points.

Speaker #1: With its 50 basis points higher than our previous guidance. Effectively, of our 150 basis points increase of our revenue guidance, 100 basis points are driven by pure organic momentum and improved pipeline conversion.

Cesar Gon: Effectively, of our 150 basis points increase of our revenue guidance, 100 basis points are driven by pure organic momentum and improved pipeline conversion. Our updated guidance reflects the continuing strength of our first AI-driven growth vector, AI deployment, which is fueling revenue expansion through IP-based solutions and AI adoption engagements, combined with our well-oiled go-to-market strategy.

Speaker #1: Our updated guidance reflects the continued strength of our first AI-driven growth vector, AI deployment. Which is fueling revenue expansion through IP-based solutions and AI adoption engagements.

Speaker #1: Combining with our well-oiled go-to-market strategy. In addition, we estimate our adjusted EBITDA margin to be in the range of 17% to 19%. We project margin expansion to build sequentially throughout the year.

Cesar Gon: In addition, we estimate our adjusted EBITDA margin to be in the range of 17% to 19%. We project margin expansion to build sequentially throughout the year, supported by our second AI-driven growth vector, AI monetization. As the adoption of new pricing models accelerates and enable us to incrementally capture a great share of the productivity gains and business value created by AI. With that, we are ready to begin the Q&A session. Thank you.

Speaker #1: Supported by our second AI-driven growth vector, AI monetization. As the adoption of new pricing models accelerates and enables us to incrementally capture a great share of the productivity gains and business value created by AI.

Speaker #1: With that, we are ready to begin the Q&A session. Thank you.

Operator: All right. We'll now begin the question-and-answer session. I'll announce each participant's name. Once you hear your name, please unmute your line and ask your question. When you're done, please mute your line. The first question comes from Gustavo Farias from UBS. Gustavo, please go ahead.

Speaker #2: All right. We'll now begin the question-and-answer session. I'll announce each participant's name. Once you hear your name, please unmute your line and ask your question.

Speaker #2: Then, when you're done, please mute your line. The first question comes from Gustavo Farias from UBS. Gustavo, please go ahead.

Gustavo Farias: Hi, everyone. Thanks for taking my questions. 2 on my end. First of all, congratulations on the results. First question, if you could provide a call on the current pipeline of projects and the mix between the types, some of the types of contracts, time and materials, outcome-based, fixed price, and how this has been evolving, and the margin profile, you've been encountering in each of them. My second question is related to margins. We've seen the margin below, a little bit below, our numbers and consensus numbers. Of course, you explained very clearly the main drivers. Just to double-check here, how much of that was already expected by the previous and current margin guidance?

Speaker #3: Hi everyone. Thanks for taking my questions. Two on my end. First of all, congratulations on the results. First question, if you could provide a caller on the current pipeline of projects and the mix between the types among the types of contracts, timing materials, outcome-based fixed price, and how this has been evolving, and the margin profile you've been encountering in each of them.

Speaker #3: My second question is related to margins. We've seen a margin below, a little bit below our numbers, and consensus numbers. Of course, you explained very clearly the main drivers.

Speaker #3: Just to double-check here, how much of that was already expected by the previous and current margin guidance? And is it fair to assume margin based on Q1 results could be brought towards the lower end of this 17% to 19% range?

Gustavo Farias: It's fair to assume, margin, based on Q1 results, could be brought towards the lower end of this 17% to 19% range. That's my second question. Thank you, guys.

Speaker #3: That's my second question. Thank you, guys.

Cesar Gon: Thanks, Gustavo. I can handle the first one. Then Stanley can get the second one. Regarding pricing models, as planned, we are now advancing what we are calling the AI monetization effort. Basically is an effort to synchronize AI deployment with the evolution of our pricing models, to be more value-based, and of course, giving us the opportunity to capture more margins from the efficiency and impact we are generating. We disclosed for the first time this evolution by giving the data point of 20% of all the new sales in Q1 were already based on these value-based models.

Speaker #2: Thanks, Gustavo. I can handle the first one and then Stanley can get the second one. Regarding pricing models, as planned, we are now advancing what we are calling the AI monetization effort that basically is an effort to synchronize AI deployment with the evolution of our pricing models.

Speaker #2: To be more value-based and, of course, giving us the opportunity to capture more margins from the efficiency and impact we are generating. We disclosed for the first time the evolution by giving the data point that 20% of all the new sales in the first quarter were already based on these value-based models.

Cesar Gon: Value-based models is, for us, is a combination of output-based with price per consumption, or we call agent computing units, when we sell as in a size model, and outcome-based. Output, consumption, and outcome-based. This is basically what is behind the 20% we disclose, the combination of a mix of these different pricing models. We believe the future will be really a hybrid model where we combine. It depends on the situation, the scenario. We combine all these alternatives in the end with the will to provide more flexibility to our clients, skin in the game from CI&T regarding our ability to leverage value from the AI deployment, and also, of course, capture more of the share of the impact we are generating.

Speaker #2: Value-based models is, for for us, a combination of output-based with price per consumption or we call agent computing units when we sell in a SaaS model, and outcome-based.

Speaker #2: So output consumption and outcome-based. This is basically what is behind the 20% we disclosed the combination of a mix of this different pricing models.

Speaker #2: We believe the future will really be a hybrid model, where we combine, depending on the situation and the scenario, all these alternatives.

Speaker #2: In the end, the will to provide more flexibility to our clients is key in the game from CI&T regarding our ability to leverage value from the AI deployment and also, of course, capture more of the share of the impact we are generating.

Cesar Gon: What we, of course, our business model is very recurring, so we have long-term contracts. That's why quarter over quarter, you're gonna see visible, tangible increment in our gross margin as a result of this move towards new pricing models. We also will keep up, I'm sure we will have part of our revenue is still based on time and material. Even time and material, if you see what's happening in the industry, time and material is being rebranded, right, as forward engineering deployment. There's a new set of opportunities, even for time material engagements, to reprice it based on deep AI competence.

Speaker #2: So what we, of course, our business model is very current. So we have a long-term contracts. So that's why quarter over quarter, you're going to see a visible tangible increment in our gross margin as a result of this move towards new pricing models.

Speaker #2: But we also will keep—I'm sure we will have—part of our revenue still based on time and material. But even time and material, if you see what's happening in the industry, time and material is being rebranded, right?

Speaker #2: As Ford engineering deployment. So there's a new set of opportunities even for time material engagements to reprice it based on deep AI competence. So I think all good moves vectors in our favor and I see very consistent strategy for CI&T on these two vectors, AI deployment combined with a disciplined AI monetization.

Cesar Gon: I think all good moves, vectors, in our favor, and I see a very consistent strategy for CI&T on these two vectors: AI deployment combined with a disciplined AI monetization. Stanley, if you could address specifically the second question from Gustavo.

Speaker #2: Stanley, if you could address specifically the second question from Gustavo.

Stanley Rodrigues: Yes. Gustavo, thank you for the question about margins. Well, if you see, Gustavo, we are maintaining our guidance of EBITDA of the range of 17% to 19%. What is built in that guidance

Speaker #3: Yes, Gustavo, thank you for the question about margins. Well, if you see, Gustavo, we are maintaining our guidance of EBITDA, of the range of 17% to 19%.

Speaker #3: And what is built in in that guidance? First, structural characteristics of our business. Seasonality. We have a higher margins towards second half of the year.

Stanley Rodrigues: First, structural characteristics of our business, seasonality. We have higher margins towards second half of the year. We also have an operating leverage going on for the last years, and we will continue to see that throughout 2026. On top of that, we have the margin expansion out of the AI monetization through new engagement models. All of that combined is, let's say compensating for the real appreciation, which is a headwinds to the margins, which is already within or in this 17% to 19% guidance. At the end, if you, if you see in absolute terms, EBITDA will increase from in comparison to 2026. The question is more towards the margin effects in the revenue.

Speaker #3: We also have an operating leverage going on for the last years, and we will continue to see that throughout 2026. And on top of that, we have the margin expansion out of the AI monetization through new engagement models.

Speaker #3: So all of that combined is, let's say, compensating for the real appreciating appreciation, which is a headwind to the margins, which is already within or in this 17 to 19 guidance.

Speaker #3: And at the end, if you see in absolute terms, EBITDA will increase from comparison to 2026. So the question is more towards the margin effects in the revenue.

Gustavo Farias: That's very helpful. Thank you, guys.

Speaker #3: That's very helpful. Thank you, guys.

Eduardo Galvão: Thanks.

Eduardo Galvão: Thanks, Gustavo. Our next question comes from Puneet Jain from JP Morgan. Hi, Puneet.

Speaker #2: Thanks.

Speaker #4: Thanks, Gustavo. Our next question comes from Punet Jane from JP Morgan. Hi, Punet.

Puneet Jain: Hey, thanks for taking my question. I also have like a question on this new AI-based delivery model agentic SDLC. Like if assuming like if some of those contracts stay as time and material, how do you integrate like the token cost and like the overall like the AI portion of cost in your delivery structure? How does like the margin profile of some of those contracts compare with your typical people-based models?

Speaker #5: Hey, thanks for taking my question. I also have a question on this new AI-based delivery model agentic SDLC. So assuming if some of those contracts stay as time and material, how does how do you integrate that token cost and the overall AI portion of cost in your delivery structure?

Speaker #5: And how does the margin profile of some of those contracts compare with your typical people-based models?

Cesar Gon: Thanks, Puneet. Basically, in terms of pricing, even in the time and material engagements, we continue to see a very rational pricing environment and a lot of openness from our clients to discuss new pricing models and to incorporate eventually new opportunities regarding AI. Now we see a lot of opportunity. Of course, the easy or let's say the low-hanging fruit is just adjust as now we are really, I think, with a very superior approach on AI deployment. We can accommodate any additional cost in our pricing model. I think the most strategic part is moving from, as I mentioned, from time material to new output-based, outcome-based, and consumption-based models.

Speaker #2: Thanks, Punet. Basically, in terms of pricing, even in the time material engagements, we consider to see a very rational pricing environment. And a lot of openness from our clients to discuss new pricing models and to incorporate eventually new opportunities regarding AI.

Speaker #2: So, we now see a lot of opportunity. Of course, the easy—or, let's say, the low-hanging fruit—is, just as now we are really, I think, with a very superior approach on AI deployment, we can accommodate any additional cost in our pricing model.

Speaker #2: But I think the real the most strategic part is moving from, as I mentioned, from time material to new output-based outcome-based and consumption-based model.

Cesar Gon: I think this as the demand is huge and the eagerness of our clients to leverage AI benefits are increasing. Of course, we need to synchronize everything, and it's what we do. I think we are very good on that. I think we are kind of very happy with what we could do in the previous quarters regarding AI deployment. What we see the speed of what we are seeing the advancement of AI monetization efforts. I see more as our ability to demonstrate value.

Speaker #2: So, I think that as the demand is huge and the eagerness of our clients to leverage AI benefits is increasing, we are not seeing—of course, we need to synchronize everything, and it's what we do.

Speaker #2: I think we are very good on that. And so I think we are kind of very happy with what we could do in the previous quarters regarding AI deployment.

Speaker #2: And what we see—the speed of what we are seeing—the advancement of AI monetization efforts. So, I see it more as our ability to demonstrate value.

Cesar Gon: In the end, if you are able to demonstrate, the impact you can generate with AI for our clients, they respond accordingly in terms of adjusting the model in the right direction.

Speaker #2: In the end, if you are able to demonstrate the impact you can generate with AI for our clients, they respond accordingly in terms of adjusting the model in the right direction.

Puneet Jain: Got it. Got it.

Speaker #5: Got it. Got it. And quickly.

Bruno Guicardi: If I can complement, Puneet, like the adjustment is not a gradual incremental one, right? We're talking about 3x, 5x, 7x. When you kind of create that type of impact, to Cesar's point, like clients are open to having more of that and expand, and that's how we've been growing with, you know, with increasing wallet share within clients, getting more space, you know, and making those relationships closer, right? And again, the engagement model, they're open to have more of that. It's a win-win conversation.

Speaker #4: And if I can complement Punet, the adjustment is not a gradual incremental one, right? We're talking about 3X, 5X, 7X. So when you kind of create that type of impact.

Speaker #4: To Cesar's point, clients are open to having more of that and to expanding, and that's how we've been growing—with no increase in wallet share within clients, but getting more space and making those relationships closer, right?

Speaker #4: So and again, the engagement model, they're open to have more of that. So it's a win-win conversation.

Puneet Jain: Appreciate that. Are you seeing like any impact from like the geopolitical uncertainty, the war in the Middle East, to your clients' decision-making at all? Like, any verticals, anywhere where you might be seeing signs of slowdown in Q2 compared to in Q1?

Speaker #5: Appreciate that. And are you seeing any impact from the geopolitical uncertainty, the war in the Middle East to your clients' decision-making at all? Any verticals anywhere where you might be seeing signs of slowdown in second quarter compared to in Q1?

Bruno Guicardi: Not really, no. So far, we haven't. The dynamics of this growth and the growth that we're kind of guiding is, it's based on the dynamic within our clients and, you know, our ability to kind of create more value than our competitors and within those clients and winning, you know, wallet share and growing with them. They're big, stable companies, leaders in their market. They're solid companies. They're growing. They're doing well. If we do our part, which is, you know, create value for them and being ahead of the pack, which we think we are at this point, and we have to keep ahead of the pack.

Speaker #2: No, not really, no. So far, we haven't again, the dynamics of this growth and the growth that we're kind of guiding is based on the dynamic within our clients and our ability to kind of create more value than our competitors within those clients and in winning wallet share and growing with them.

Speaker #2: And they're big stable companies, leaders in their market. So they're solid companies. They're growing. They're doing well. So if we do our part, which is create great value for them and being ahead of the pack, which we think we are at this point, and we have to keep ahead of the pack, I don't think the macro will impact a ton.

Bruno Guicardi: I don't think, you know, the, the macro, will impact a ton.

Cesar Gon: Okay. Thank you.

Speaker #5: Got it. Thank you.

Eduardo Galvão: Thanks, Puneet. Our next question comes from Steven from Wedbush. Hey, Steven.

Speaker #4: Thanks, Punet. Our next question comes from Steven from Wedbush. Hey, Steven.

Steven Wahrhaftig: Hey, thanks guys. Congrats on the quarter. Thanks for taking the question. I have two questions, one on the value-based pricing, and then one also on the headcount growth. Specifically for the value-based pricing, you mentioned that 20% of the net sales is coming from this value-based pricing approach. Do you have any sort of long-term gauge or any sort of long-term target that we can take into account for this value-based pricing and what the company's expectations are to really get a lot of these new customers onto this value-based pricing approach?

Speaker #6: Hey, thanks, guys. Congrats on the quarter. Thanks for taking the question. So I have two questions, one on the value-based pricing and then one also on the headcount growth.

Speaker #6: Specifically for the value-based pricing, you mentioned that 20% of the net sales is coming from this value-based pricing approach. Do you have any sort of long-term gauge or any sort of long-term target that we can take into account for this value-based pricing and what the company's expectations are to really get a lot of these new customers onto this value-based pricing approach?

Steven Wahrhaftig: Turning to the headcount, especially when you're starting to see over 80% of your headcount really leveraging AI and becoming the curators of AI, as you described, is that gonna lead to any sort of headcount reduction in the near term or in the long term, and something that we can take into account from there?

Speaker #6: And then turning to the headcount, especially when you're starting to see over 80% of your headcount really leveraging AI and becoming the curators of AI as you described, is that going to lead to any sort of headcount reduction in the near term or in the long term and something that we can take into account from there?

Cesar Gon: I can get the first one, Steven. Thank you for your question, Bruno can help with the second. Regarding new pricing models, we see this change happening in a horizon of maybe 18 months, as a natural evolution of as the new sales become relevant in terms of revenue quarter over quarter. Gradually, you're gonna see the effect happening in our especially in our gross margin, where you can clearly see the difference on the value we are capture from the engagement. Another thing that is not just pricing models, I think our offerings are evolving to generate much more impact to our clients. It give us a lot of flexibility.

Speaker #2: I can get the first one, Steve. Thank you for your question, and Bruno can help with the second. Regarding new pricing models, we see this change happening in the horizon of maybe 18 months.

Speaker #2: As a natural evolution of as the new sales become relevant in terms of revenue, water over quarter. So gradually, you're going to see the effect happening in our especially in our gross margin where you can clearly see the difference on the value we are capturing from the engagements.

Speaker #2: Another thing that is not just pricing models. I think our offerings are evolving to generate much, much more impact to our clients. So it gives us a lot of flexibility and as we see the momentum of AI deployment increase, and the way we are very well positioned we see room for really accommodate the CI&T in a better shape regarding value capture.

Cesar Gon: As we see the momentum of AI deployment increase and the way we are very well-positioned, we see room for really accommodate CI&T in a better shape regarding value capture. Gradually, quarter by quarter, following the impact, the increased impact we are generating for our clients. Impact around, let's say, horizontal impact regarding efficiency. A lot of things that we can do now with an amazing return on investment for them regarding data, regarding app modernization and so on, and direct AI impact with the new use cases and that are emerging for every vertical and segment. A lot of opportunities, and I think we are very well-positioned to capture that. Regarding our workforce, I think Bruno can address that.

Speaker #2: So gradually, quarter by quarter, following the impact, the increased impact we are generating for our clients. Impact around, let's say, horizontal impact regarding efficiency.

Speaker #2: So a lot of things that we can do now with an amazing return on investment for them, regarding data, regarding app modernization, and so on.

Speaker #2: And direct AI impact with the new use cases and that are emerging for ever vertical and segment. So a lot of opportunities. And I think we are very well positioned to capture that.

Speaker #2: Regarding our workforce, I think Bruno can address that.

Bruno Guicardi: Thank you for the question, Steven. The way we see this, right, even if the total addressable market reduces in size, it would not reduce by a lot, and it may not even reduce at all. Our ambition here is actually to be a leader in this new industry, in the industry of AI builders. If we accomplish that, and to our point here, we're ahead of the curve, and our plan is to be aggressively ahead of that curve, and we'll be a winner in this new market, right? Being a winner in this new market, I think will not necessarily mean that we will grow by revenue, but even by headcount will continue to grow.

Speaker #4: Yeah. So thank you for the question. Steve, the way we see this, right, so even if the total addressable market reduces in size, it would not reduce by a lot and maybe not even not reduce at all.

Speaker #4: But our ambition here is actually to be a leader in this new industry, in the industry of the AI builders. And if we accomplish that, and to our point here, we're ahead of the curve—and our plan is to be aggressively ahead of that curve—then we'll capture, there'll be a winner in this new market, right?

Speaker #4: So being a winner in this new market, I think will not necessarily mean that we will grow by revenue, but even by headcount, we'll continue to grow.

Bruno Guicardi: That's the ambition, is to win in this new game and to keep, you know, give an opportunity for our people and having them have their own grow and becoming this, you know, leading professionals in their industry and creating value for our clients. I don't think we'll kind of anticipate any headcount reduction in that scenario.

Speaker #4: So that's the ambition, is to win in this new game. And to keep giving opportunity for our people and having them have their own growth and becoming these leading professionals in their industry, and creating value for our clients.

Speaker #4: And I don't think we'll kind of anticipate any headcount reduction in that scenario. Just to add to that, Steve, one way to look at that, as we evolve on this new engagement models, we should see higher revenue per headcount.

Eduardo Galvão: Just to add to that, Steve, one way to look at that, as we evolve on these new engagement models, we should see higher revenue per headcount. I think it's just the best way to see that trend going forward. As Bruno mentioned, growing headcount and growing revenue per headcount as well, that should be a good indicator to track as we evolve in these new models.

Speaker #4: I think it's the best way to see that trend going forward. So, as Bruno mentioned, growing headcount and growing revenue per headcount as well.

Speaker #4: So that should be a good indicator to track as we evolve in these new models.

Cesar Gon: Bruno, let me add one thing that I think is important. Looking back, we did an amazing job in the past three years. We really introduced CI&T Flow. We foster adoption. We're reskilling our whole team around artificial intelligence. We also turn every single CI&T engagement into an AI engagement. Now we have builders, AI builders. That is, I think, the most important talent to make AI deployment feasible. I think it was a very good strategy not to create a different business unit for AI services. We said, Well, let's look at our core offerings and redesign around AI, two years ago. Now we are leveraging the results of this bets.

Speaker #5: Gabon, let me add one thing that I think is important. Looking back, we did an amazing job in the past three years. We really introduced CI&T flow.

Speaker #5: We foster adoption. We reskilling our whole team, around artificial intelligence. And we also turn every single CI&T engagement in to an AI engagement. So now we have builders, AI builders.

Speaker #5: That is, I think, the most important talent for to make AI deployment feasible. So I think it was a very good strategy, not to create a different business unit for AI services.

Speaker #5: We said, "Let's look at our core offerings and redesign around AI." Two years ago, so now we are leveraging the results of these bets.

Steven Wahrhaftig: Got it. Thanks, guys.

Speaker #3: Got it. Thanks, guys.

Eduardo Galvão: Thank you, Steve. Our next question comes from Bryan Bergin from TD Cowen. Hey, Bryan, your line is open.

Speaker #4: Thank you, Steve. Our next question comes from Brian Bergen from TD Cowen. Hey, Brian, your line is open.

Bryan Bergin: Hey, guys. Good afternoon. Thank you. I wanted to also ask about this contract structure evolution. Is this across industries, kind of across the portfolio? Can you talk about the nature of the clients that are going along with this and kind of the characteristics that those clients have that you could learn from to better kind of cross-pollinate across the entire portfolio?

Speaker #6: Hey, guys. Good afternoon. Thank you. So, I wanted to also ask about this contract structure evolution. Is this a cross-industries, kind of across the portfolio?

Speaker #6: Can you talk about the nature of the clients that are going along with this, and kind of the characteristics that those clients have that you could learn from to better kind of cross-pollinate across the entire portfolio?

Cesar Gon: Thanks, Bryan. Great to see you. As I think part of the evolution of the pricing models is combining with our IP-based offerings. As more IP is on the table in a deal, more I would say more feasible is to introduce new commercial models. We are combining, and as we are working hard around our vertical IP-based solutions, by now we have, I think, a solid set of assets that allow us to really foster our AI monetization through the new model. I think IP, intellectual property, is an important foundation of our strategy. If I can summarize our strategy in first two growth vectors. We mentioned AI deployment, AI monetization.

Speaker #2: Thanks, Brian. Great to see you. I think part of the evolution of the pricing models is combining with our IP-based offerings. As more IP is on the table in a deal, more, I would say, more feasible is to introduce new commercial models.

Speaker #2: So we are combining and as we are working hard around our vertical IP-based solutions, by now we have I think a solid set of assets that allow us to really foster our AI monetization through the new models.

Speaker #2: So I think IP intellectual property is an important foundation of our strategy. If I can summarize our strategy in first, two growth vectors. We mentioned AI deployment, AI monetization.

Cesar Gon: Four pillars, IP-based offerings, commercial models, data is incredible what we are doing around data, and partnerships with the hyperscalers. These four pillars are fostering our growth vectors, I think, in an amazing way. Our job is to synchronize all these momentums and capture the growth and the value we deserve by the impact we are generating.

Speaker #2: And four pillars: IP-based offerings, commercial models, data—it's incredible what we are doing around data—and partnerships with the hyperscalers. So these four pillars are fostering our growth vectors, I think, in an amazing way.

Speaker #2: So our job is to synchronize all these momentums and capture the growth and the value we deserve by the impact we are generating.

Bryan Bergin: Okay. As it relates to your large clients, you had, you know, another, good performance, top 1, top 10. Maybe just dig in there, your visibility to continuing momentum in those accounts?

Speaker #6: Okay. As it relates to your large clients, so you had another good performance—top one, top 10. Maybe just dig in there, your visibility to continue momentum in those accounts.

Cesar Gon: Yeah. We are I think this quarter we reported we grew in all verticals and cohort of clients, top one, top ten, X top one, X top ten. It's a very broad good momentum regarding AI deployment. Of course, we stay focused on the kind of client who we believe is the hotspot for CI&T, large complex organization that are really looking for ways to leverage AI impact. I think it's even regions, we grew in Latin America and North America, even new markets had a good response in this last quarter. We are expecting the momentum will continue in other verticals and regions.

Speaker #2: Yeah. We are, I think, this quarter, we reported, we grew in all verticals and cohort of clients, top one, top 10, X top one, X top 10.

Speaker #2: So, it's a very broad, good momentum regarding AI deployment. Of course, we stay focused on the kind of client who we believe is the hotspot for CI&T—large, complex organizations that are really looking for ways to leverage AI impact.

Speaker #2: And I think it's even regions we grew in: Latin America, North America—even new markets had a good response in this last quarter. So we are expecting the momentum will continue in all the verticals and regions.

Bryan Bergin: All right. Very good. Thank you.

Speaker #6: Very good. Thank you.

Cesar Gon: Thanks, Bryan.

Eduardo Galvão: Thanks, Bryan. Our next question comes from Luke Morrison from Canaccord. Hey, Luke, please go ahead.

Speaker #2: Thanks, Brian.

Speaker #4: Thanks, Brian. Our next question comes from Luke Morrison from Canaccord. Hey, Luke, please go ahead.

Luke Morrison: Hey, guys. Good to see you. Thanks for taking the question. Maybe one on gross margins. You know, they compressed quite a bit in the quarter. Can you just help us unpack, you know, what's driving that, whether it's entirely, you know, this FX and payroll tax impact, or if there's maybe an element of AI spend and AI investment that you maybe need to scale into? How should we be thinking about modeling gross margins, you know, for the rest of the year and onward?

Speaker #6: Hey, guys. Good to see you. Thanks for taking the question. So maybe one on gross margins. They compressed quite a bit in the quarter.

Speaker #6: Can you just help us unpack what's driving that, whether it's entirely this FX and payroll tax impact or if there's maybe an element of AI spend and AI investment that you maybe need to scale into?

Speaker #6: And how should we be thinking about modeling gross margins for the rest of the year and onward?

Cesar Gon: Luke, thank you for the question. Well, let's unpack as you want. First, by far it is the FX effect, and it is more than 200 basis only in that aspect. We presented in the slides the adjusted by current currency equivalent. You have to bear in mind that by seasonality, we have a load every Q1 of the year, a load of salary adjustments that will be, throughout the year, compensated by contract adjustments and so on. Again, here we have the combination of the structural aspect and this specific FX effect. Those are, I would say, the main aspects for the Q1.

Speaker #2: Look, thank you for the question. Well, let's unpack as you want. First, by far, it is the effects effect and it's more than 200 basis only in that aspect.

Speaker #2: We presented in the slides the adjusted by current currency. Equivalent, right? And you have to bear in mind that by seasonality, we have a load every first quarter of the year, a load of salary adjustments that will be throughout the year compensated by contract adjustments and so on.

Speaker #2: So again, here we have the combination of the structural aspect and this specific FX effect. So those are I would say the main aspects for the first quarter.

Cesar Gon: As modeling for the next quarter, again, we have the seasonality playing here. We have higher working days throughout the next quarter in comparison to Q1, for example. We have the leveraging of SG&A as we grow the business. What else? We have a combination of structural aspects and in addition, we do have the monetization of the new engagement models taking a play, an important role here as well throughout the next quarters. I wouldn't say that you shouldn't model anything different than what we guided in terms of EBITDA. That's why we are guiding, right? We have the range for the reasons usually we have for that range, right?

Speaker #2: And as modeling for the next quarter, again, we have the seasonality play here. We have a higher working days throughout the next quarter, comparison to first quarter, for example.

Speaker #2: We have the leveraging of CNA as we grow the business. So what else? We have a combination of structural aspects and in addition, we do have the monetization of the new engagement models taking a play, an important role here as well throughout the next quarters.

Speaker #2: So I wouldn't say that you shouldn't model anything different than what we guided in terms of EBITDA that's why we are guiding, right? So we have the range for the reasons usually we have for that range, right?

Stanley Rodrigues: On the top of the range, we have a reflection of what we envision in all the pipeline that we have. Midpoint, we have a more conservative aspect of that. In the lower, we have macro effects or something compounding there to be more conservative. Yeah, that's a breakdown, Luke.

Cesar Gon: On the top of the range, we have a reflection of what we envision in all the pipeline that we have. Midpoint, we have a more conservative aspect of that. In the lower, we have macro effects or something compounding there to be more conservative. Yeah, that's a breakdown, Luke.

Speaker #2: On the top of the range, we have a reflection of what we envision in all the pipeline that we have. Midpoint, we have a more conservative aspect of that, and in the lower, we have a macro effect or something compounding there to be more conservative, so yeah.

Speaker #2: That's the breakdown. Look, got it.

Luke Morrison: Got it. Very helpful. Maybe a quick follow-up there. You know, of that 20% of new sales in Q1 that are on these new pricing models, can you just give us a sense of like what do gross margins look like on those engagements? What can it scale to over time? How can that, like, impact the overall gross margin profile of the business over like a 2 to 5-year period?

Speaker #6: Very helpful. And then maybe a quick follow-up there. Of that 20% of new sales in Q1 that are on these new pricing models, can you just give us a sense of what do gross margins look like on those engagements?

Speaker #6: What can it scale to over time? How can that impact the overall gross margin profile of the business over a two to five-year period?

Stanley Rodrigues: Yeah. Well, what we are doing as we capture value on this monetization, AI monetization, the trend is to reinvest in sales. If you would see increments in gross margin, the trend is that we would reinvest in sales to capture and to benefit growth. At the end of the day, it's about the growth and the organic growth and to continue in this strong momentum that we are.

Cesar Gon: Yeah. Well, what we are doing as we capture value on this monetization, AI monetization, the trend is to reinvest in sales. If you would see increments in gross margin, the trend is that we would reinvest in sales to capture and to benefit growth. At the end of the day, it's about the growth and the organic growth and to continue in this strong momentum that we are.

Speaker #2: Yeah. Well, what we are doing as we capture value on this monetization, AI monetization, the trend is to reinvest in sales. So if you would see an increment in gross margin, the trend is that we would reinvest in sales.

Speaker #2: To capture and to benefit growth. So at the end of the day, it's about the growth and the organic growth and to continue in this strong momentum that we are.

Speaker #2: So usually that's the engineering.

Cesar Gon: Luke,

Stanley Rodrigues: That's the engineering.

Cesar Gon: Let me help here. Luke, we can be a little more specific. I think the new pricing models can increase, depends on the, of course, in the context, the engagement, from 3 or 4 percentage points to 10 or 15 percentage points in terms of a contribution margin in the engagement. That's why we see as a pillar in our strategy to capture. This is only possible because we are not delivering the same kind of impact. We are delivering much higher impact. If you try to discuss pricing model with the client delivering the same value, it's of course not gonna work.

Stanley Rodrigues: Let me help here. Luke, we can be a little more specific. I think the new pricing models can increase, depends on the, of course, in the context, the engagement, from 3 or 4 percentage points to 10 or 15 percentage points in terms of a contribution margin in the engagement. That's why we see as a pillar in our strategy to capture. This is only possible because we are not delivering the same kind of impact. We are delivering much higher impact. If you try to discuss pricing model with the client delivering the same value, it's of course not gonna work.

Speaker #3: Let me help here. Look, we can be a little more specific. I think the new pricing models can increase depends on the, of course, in the context, the engagement from three or four percentage points to 10 or 15 percentage points in terms of contribution margin, the engagement.

Speaker #3: So that's why we see as a pillar in our strategy to capture part of this. This is only possible because we are not delivering the same kind of impact; we are delivering much higher impact.

Speaker #3: If you try to discuss pricing models with the client while delivering the same value, it, of course, is not going to work. But we are discussing delivering a different level of impact.

Cesar Gon: We are discussing delivering a different level of impact, and this is allow us to move towards these more powerful pricing models. Another thing is, I think, if you look the numbers we just released, if you combine our organic growth of 23.2% with our adjusted EBITDA margin of 15.2%, we reached, and we add that, we reached 38.4%, nearly back to the famous Rule of 40.

Stanley Rodrigues: We are discussing delivering a different level of impact, and this is allow us to move towards these more powerful pricing models. Another thing is, I think, if you look the numbers we just released, if you combine our organic growth of 23.2% with our adjusted EBITDA margin of 15.2%, we reached, and we add that, we reached 38.4%, nearly back to the famous Rule of 40.

Speaker #3: And this is allow us to move towards this more powerful pricing models. Another thing is I think if you look at the numbers we just released, if you combine our organic growth of 23.2% with our adjusted EBITDA margin of 15.2%, we reached and we add that we reached 38.4%, nearly back to the famous rule of 40.

Cesar Gon: If we put in perspective everything we are doing in looking ahead, I think we can expect. You're going to see from next quarter better gross margins, as a result, of course, the fundamental seasonality, a lot of things that Stan described, but also the beginning of the impact of the new pricing models. This will allow us to increase our sales investments. What is the strategy to fuel high growth and a strong bottom line in the long term? This is the piece of the puzzle with our handle now, I think in a very good way.

Stanley Rodrigues: If we put in perspective everything we are doing in looking ahead, I think we can expect. You're going to see from next quarter better gross margins, as a result, of course, the fundamental seasonality, a lot of things that Stan described, but also the beginning of the impact of the new pricing models. This will allow us to increase our sales investments. What is the strategy to fuel high growth and a strong bottom line in the long term? This is the piece of the puzzle with our handle now, I think in a very good way.

Speaker #3: So, if we put in perspective everything we are doing in looking ahead, I think we can expect better. You're going to see, from next quarter, better gross margins.

Speaker #3: As a result, of course, the fundamentals, seasonality, a lot of things—that is described—but also the beginning of the impact of the new pricing models.

Speaker #3: And this is what allow us to increase our sales investments. What is the strategy to full high growth and strong borderline in the long term?

Speaker #3: So, this is the piece of the puzzle we are handling now, I think, in a very good way.

Luke Morrison: Excellent. Excellent color. Thank you very much.

Speaker #6: Excellent. Excellent, Tyler. Thank you very much.

Stanley Rodrigues: Thanks, Luke.

Speaker #3: Thanks, Luke.

Eduardo Galvão: Thank you, Luke. Our next question comes from Cesar Medina from Morgan Stanley. Hey, Medina. Please go ahead.

Speaker #4: Thank you, Luke. Our next question comes from Cesar Medina from Morgan Stanley. Hey, Medina, please go ahead.

Cesar Medina: Hey, congratulations on the results, quite strong and broad-based. The question that I had was 2-fold. One, sorry to keep pressing on the new pricing mechanism, but it's just 20% of the new sales, right? It's not of the total revenues of the quarter. If I were to ask you in terms of when you look at your pipeline, the one that you're building, not on the Q2, but on the pipeline, how prevalent is that new sales mechanism? That would be the first question, then I'll have a different topic.

Speaker #5: Hey, congratulations on the results. Quite strong and broad-based. The question that I had was twofold. One, sorry to keep pressing on the new pricing mechanism, but it's just 20% of the new sales, right?

Speaker #5: It's not of the total revenues of the quarter. And if I were to ask you, in terms of when you look at your pipeline—the one that you're building, not on the second quarter, but on the pipeline—how prevalent is that new sales mechanism?

Speaker #5: That would be the first question and then I'll have a different topic.

Cesar Gon: Very good, Medina. Thank you for the question. Basically, if you know, we have a lot of recurring, long-term revenue, but in a timeline of 18 months, everything that we will be doing will be new sales. That's the first data point. It takes basically 18 months to renew the 100% of the engagements of CI&T. The second is pipeline healthy. The data point now is 30% large. The number of deals in terms of value is 30% higher now than the same period last year, and 100% relate to AI deployment.

Speaker #3: Very good, Medina. Thank you for the question. Basically, as you know, we have a lot of recurring long-term revenue, but in a timeline of 18 months, everything that we will be doing will be new sales.

Speaker #3: So that's the first data point. So it takes basically 18 months to renew 100% of the engagements of CI&T. And the second is pipeline health— the data point now is 30% large.

Speaker #3: So the number of deals in terms of value is 30% higher now than the same period last year. And 100% relate to AI deployment.

Cesar Gon: If you combine this data, you see how we are growing, and that is AI deployment and evolving our AI monetization along the next quarters.

Speaker #3: So, this is—if you combine this data, you see how we are growing, and that is AI deployment and evolving our AI monetization along the next quarters.

Cesar Gon: If you combine this data, you see how we are growing, and that is AI deployment and evolving our AI monetization along the next quarters.

Cesar Medina: Pursuant to what Stanley mentioned in terms of the margins of the new pricing mechanism, if that you are reinvesting in growth. If I were to look at the growth margin component, these growth margins of these new type of engagements, is the margin closer to software or, you know, higher? You mentioned.

Speaker #5: But pursuant to what Stanley mentioned in terms of the margins of the new pricing mechanism—if you are reinvesting in growth, but if I were to look at the gross margin component, these gross margins of these new types of engagements—is the margin closer to software or higher?

Cesar Gon: Depends. Depends. What's software?

Speaker #5: You mentioned.

Speaker #3: Depends. What software?

Cesar Medina: Yeah. Okay.

Speaker #5: Yeah. Okay.

Cesar Gon: I think now as we are looking, I think we have a very healthy strategy.

Speaker #3: I think now we are looking at our I think we have a very healthy strategy. But the new reality is a business with higher gross margin, significantly higher gross margin, but also with different elements in the P&L.

Cesar Medina: Yeah

Cesar Gon: The new reality is a business with higher gross margin, significantly higher gross margin, but also with different elements in the P&L.

Cesar Medina: Okay

Cesar Gon: I think in the end, it's moving to a more scale and profitable business model, but gradually as we deploy these new models and increase our effort. The mention regarding sales is because we see huge opportunity.

Speaker #3: So, but I think it's, in the end, it's moving to a more scalable and profitable business model, but gradually, as we deploy these new models and increase our effort.

Speaker #3: The mention regarding sales is because we see a huge opportunity. If the market continues to move in our direction, as we are seeing, we have the opportunity to really accelerate our expansion, and this will require broad investments around go-to-market and sales.

Cesar Medina: Yeah.

Cesar Gon: If the market continues to move in our direction as we are seeing, we have the opportunity to really accelerate our expansion, and this will require broad investments around go-to-market in sales.

Cesar Medina: Okay. The second question is pursuant to your full year guidance. Like, if I were to do the math in terms of cost and currency for Q1, Q2, that suggests that in the H2 of the year, you're sort of gonna have more muted growth. Is that sort of the right way to see it?

Speaker #5: Okay. And then the second question is pursuant to your full-year guidance. If I were to do the math in terms of cost and currency, for first quarter, second quarter, that suggests that in the second half of the year, you're sort of going to have more muted growth.

Speaker #5: Is that sort of the right way to see it?

Cesar Gon: Yeah. We kinda detailed that what we increased in 150-

Speaker #3: Yeah. We cannot detail what we increase in 150 basis points. 100 is pure reflection of demand and pipeline and so on. And 50 basis points is FX tailwind.

Cesar Medina: Yeah

Cesar Gon: basis points. 100 is pure reflection of demand and pipeline and so on. 50 basis points is FX tailwind.

Cesar Medina: Okay.

Cesar Gon: Of course, as we have been doing for six consecutive quarters, we intend to do better, increase our numbers as we win the AI deployment game.

Speaker #3: So, and of course, as we have been doing for several—six consecutive quarters—we intend to do numbers as we win the AI deployment game.

Cesar Medina: Okay.

Speaker #5: Okay.

Eduardo Galvão: Thank you, Medina. That concludes our Q&A session. I will now invite Cesar Gon to proceed with his closing remarks.

Speaker #4: Thank you, Medina. So that concludes our Q&A session. I'll now invite Cesar Gon to proceed with his closing remarks.

Cesar Gon: Thanks, Galvao. Thank you Bruno, Stanley, Eduardo. Again, thank you all for joining us today. More especially, I want to thank you all CI&Ters around the world. Congratulations for one more record quarter. Let's keep pushing. A special thank you for all, as well for our clients for choosing CI&T in this extraordinary moment of AI deployment and AI-driven innovation. Stay well. See you soon.

Speaker #3: Thanks, Gon. Thank you, Bruno, Stanley, Eduardo. Again, thank you all for joining us today. And more especially, I want to thank you all CI&Ters around the world.

Speaker #3: Congratulations for one more record quarter. Let's keep pushing. And a special thank you as well for our clients for choosing CI&T in this extraordinary moment of AI deployment.