CI&T Q4 2024 Earnings Report

CI&T EPS Results

• Actual EPS: $0.10
• Consensus EPS: $0.08
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: N/A

CI&T Revenue Results

• Actual Revenue: $112.53 million
• Expected Revenue: $111.33 million
• Beat/Miss: Beat by +$1.20 million
• YoY Revenue Growth: N/A

CI&T Announcement Details

• Quarter: Q4 2024
• Date: 3/12/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, March 12, 2025
• Conference Call Time: 4:30PM ET

CI&T (NYSE:CINT), Inc. is a global technology and digital transformation company that helps organizations develop, modernize and operate digital products and business systems. Its services include digital strategy, user experience and product design, software engineering, cloud technology, data and artificial intelligence, and the modernization of legacy applications.

The company works with businesses across industries such as financial services, consumer goods, healthcare, manufacturing and technology. CI&T supports clients throughout the digital development lifecycle, from strategy and design through implementation, integration and ongoing technology operations.

Founded in 1995 in Brazil, CI&T has expanded its operations internationally and serves customers across North America, Latin America, Europe and the Asia-Pacific region. The company is headquartered in Campinas, Brazil, and was founded by Cesar Carvalho, who serves as its chief executive officer.

CI&T Q4 2024 Earnings Call Transcript

Key Takeaways

• In Q4 2024, CINT reported a record net revenue of R$656.5 million, up 25.6% YoY (14.7% at constant currency), driven by a 40% increase in revenue from its top 10 clients leveraging the AI-powered Cintiq Flow platform.
• For the full year, net revenue reached R$2.368 billion (+6.0% YoY; +1.3% CC), with an adjusted EBITDA margin of 18.7% and strong operating cash generation of R$467 million.
• CINT’s AI-first strategy, centered on its Cintiq Flow modernization platform, and its client-centric approach underpinned both digital transformation wins and recognition as a Forrester leader in modern application development services.
• Headcount grew 13% to ~6,900 employees in 2024, with utilization rates at 85–89% and a voluntary attrition rate of 10.7%, supported by expanded training programs to develop the next generation of AI-native talent.
• For 2025, CINT expects Q1 net revenue of at least US$110.5 million (12.6% YoY CC growth) and full-year constant-currency revenue growth of 9–15%, with an anticipated adjusted EBITDA margin of 18–20%.

Presentation

[Eduardo Galvão, Director of Investor Relations at CI&T]

Welcome to CI&T Earnings Call for the fourth quarter and full year of 2024. I am Eduardo Galvão, 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 and Europe; and Stanley Rodrigues, our CFO. This event is being recorded, and all participants will be in a listen-only mode during the company's presentation. After that, there will be a Q&A session. If you'd like to submit a question, please send it via email to investors@ciandt.com. The presentation is available on the company's Investor Relations website, and the replay will be available shortly after the event is concluded. Some of the matters we'll discuss on this call, including our expected business outlook, are forward-looking statements.

[Eduardo Galvão, Director of Investor Relations at CI&T]

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. 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. Our agenda for today includes an overview of our 2024 highlights, followed by some of our business cases. We'll then talk about our people and our financial results. At this time, I'll pass it on to Cesar Gon to begin our presentation. Cesar.

[Cesar Gon, Founder and CEO at CI&T]

Thank you, Galvão, and good day, everyone. Before discussing our quarterly results, I would like to acknowledge a significant milestone in our journey: CI&T's 30th anniversary. Founded in 1995, CI&T began with a bold vision to become a globally recognized leader in tech services. Over the past three decades, we have successfully navigated various market conditions and economic shifts, proudly achieving 30 consecutive years of growth. Today, we are a global force of 7,000 passionate CI&Ters across 25 countries, collaborating with some of the world's most admired brands. That's why I'm so thrilled to share that Forrester Research has recently recognized CI&T as a leader in modern application development services. A right-on-time honor, as we mark 30 years of innovation and growth. Looking ahead, our continued success rests on three strategic pillars. First, artificial intelligence: reshape industries with CI&T as a protagonist through CI&T Flow.

[Cesar Gon, Founder and CEO at CI&T]

Second, our culture of excellence: driven by top-tier talent, our key advantage. Finally, our client-centric approach: blending expertise and innovation to create lasting value and long-term relationships with our clients. Now, moving on to our financial highlights for the fourth quarter of 2024, we are proud to report a record net revenue of BRL 656.5 million, representing a 25.6% increase compared to Q4 2023. At constant currency, net revenue grew 14.7% year-over-year. This remarkable growth was driven by the outstanding performance of our top 10 clients, whose revenue increased 40% in Q4 2024 versus the same period in the previous year. These clients have been leveraging CI&T Flow, our AI-powered platform, to accelerate their digital transformation journeys. On the profitability side, our adjusted EBITDA margin reached 19.5%, surpassing the industry average. In addition, adjusted net profit totaled BRL 78 million, reflecting a 41.3% year-over-year increase.

[Cesar Gon, Founder and CEO at CI&T]

For the full year of 2024, we reached a net revenue of BRL 2,368 million, representing a 6.0% increase compared to 2023. At constant currency, net revenue grew by 1.3% year-over-year. We concluded the year with a robust adjusted EBITDA margin of 18.7%, demonstrating consistent operational efficiency over the years. Our cash generation from operating activities totaled BRL 467 million in 2024, a strong indicator of the strength and resilience of our organic operations. We are excited about the momentum we have built and remain focused on driving sustainable growth as we continue to deliver solid results for our clients and stakeholders. Now, let's explore some inspiring client success stories that highlight the diverse applications of AI.

[Cesar Gon, Founder and CEO at CI&T]

As Mondelez keeps empowering people to snack right, our partnership has been helping them to make the best with the best data. By integrating data across multiple lines into a single platform, we've enabled real-time visibility and increased manufacturing line efficiency, allowing even more time for strategic actions. We're excited to continue our journey helping Mondelez to drive growth and lead the future of snacking. 85% increase in product additions. This is the impact of Project Vitrine. Natura, one of the leaders in Latin America's beauty and cosmetics sector, is transforming the order capture experience for over 1 million sales consultants from Natura and Avon. Project Vitrine is a personalized platform powered by AWS's robust infrastructure and CI&T's digital expertise, resulting in an increase in cart additions and over 13 million monthly searches with its smart search feature. As we expand globally, Vitrine is set to enhance consultants' experiences worldwide.

[Cesar Gon, Founder and CEO at CI&T]

CI&T, AWS, and Natura together in the journey of shaping the future of beauty through technology. The company Mitsui Sumitomo, part of the largest insurance group in Asia, faced a crucial challenge: high licensing costs for an essential tool in orchestrating mass insurance quotations. The need to remain competitive and update its calculation rules required an efficient and cost-effective solution. We were called upon to address this scenario and develop a solution that reduced costs, optimized performance, and simplified maintenance for this vital operation. The benefits of the new solution were remarkable. The company saw a drastic reduction in annual licensing costs, which decreased from approximately $1 million per year to a one-time investment of about $500,000 for the project with CI&T.

[Cesar Gon, Founder and CEO at CI&T]

In addition to a meager monthly cloud cost, the modernization envisioned by Mitsui Sumitomo and executed in partnership with CI&T resulted in significant annual savings and improved efficiency in the quotation process, reducing calculation time by 54% by eliminating high costs and technological modernization.

[Cesar Gon, Founder and CEO at CI&T]

Motability Operations is the largest vehicle leasing company in the U.K. It operates the Motability Scheme, where people receiving a qualifying mobility allowance can choose an affordable and accessible vehicle. They play an essential role in connecting their 800,000 disabled customers to work, healthcare, education, and independence, providing standout value. Each year, more than 250,000 vehicles come to the end of their lease and are sold into the U.K. dealer market by MFL Direct, Motability Operations' remarketing brand, on its e-commerce platform. Recognizing the need for a transformative upgrade, MFL Direct collaborated with CI&T and marketing agency Bray Leino to rebuild MFL Direct's legacy website. Our goal was clear: make purchasing easier and more intuitive for dealers.

[Cesar Gon, Founder and CEO at CI&T]

From the outset, our relationship with CI&T has been an absolute game changer. They have helped us deliver a new MFL Direct platform that allows dealers to buy cars in just one second. Their expertise and insights have allowed us to deliver technological solutions that deliver real value to our customers in the e-commerce space. More recently, they've helped us rebrand our website and deliver a new, fresh look and feel with great user experience, but also has allowed us to deliver inspected vehicles where dealers bid on vehicles, which has been a game changer for our dealer customers. The work we've done together has been absolutely phenomenal, and they really have helped us take ourselves to the next level, and I couldn't speak more highly of them.

[Cesar Gon, Founder and CEO at CI&T]

Costa Coffee, a leading name in the U.K.'s coffee landscape, joined forces with CI&T to redefine its store management approach and elevate the customer experience. In January 2024, a dynamic journey began as CI&T and Costa Coffee united with a shared mission to craft a groundbreaking tool to empower store managers with actionable insights. Their goal was clear: to develop a user-friendly interface that would engage the users, streamline operations, and boost sales and customer satisfaction. With a commitment to simplicity and a user-centric approach, CI&T and Costa Coffee introduced the Store Compass. This innovative performance tool aggregates vital store data and KPIs, ranging from sales figures to customer feedback, into a single, intuitive interface. The result? Store managers gain a crystal-clear, real-time overview of their business, allowing them to make informed decisions at the drop of a hat.

[Cesar Gon, Founder and CEO at CI&T]

The Store Compass is more than just a tool. It is a cultural shift. By focusing on personalized recommendations, it allows managers to increase efficiency and drive sales while significantly reducing the time spent accessing data, whether it is Net Promoter Scores or sales. Store managers can now benchmark their performance against similar stores in their region, fostering a culture of continuous improvement. In just under six months, the Store Compass was co-created, designed, and deployed across 1,500 stores around the U.K., with overwhelmingly positive feedback from store managers. Today, nearly 70% of Costa Coffee employees engage with the app weekly, spending an average of two minutes. Together, CI&T and Costa Coffee have brewed a recipe for success.

[Cesar Gon, Founder and CEO at CI&T]

We are proud to be recognized as a leader in the Forrester Wave for modern application development services. What truly sets CI&T apart in the MADS marketplace? It's our unique approach to driving cultural behavioral change.

[Cesar Gon, Founder and CEO at CI&T]

We focus on scaling agility.

[Cesar Gon, Founder and CEO at CI&T]

We also emphasize adaptability. We help our clients embrace uncertainty and adapt quickly in the rapidly changing marketplace.

[Cesar Gon, Founder and CEO at CI&T]

Our side-by-side approach empowers clients, increasing their skills and knowledge through cross-pollinated teams.

[Cesar Gon, Founder and CEO at CI&T]

Finally, we foster an AI-first culture within organizations.

[Cesar Gon, Founder and CEO at CI&T]

This recognition reaffirms our commitment to co-create transformative solutions, helping our clients navigate their modernization journeys.

[Cesar Gon, Founder and CEO at CI&T]

Global retail sales set to reach $24.9 trillion this year, including $5.3 trillion in e-commerce. The industry is ripe for transformation. Based on that, NRF 2025 was not just a conference, it was a glimpse into retail's future, and we were at the forefront. The Big Ideas session, featuring insights from Melissa, our Global Director of Retail Strategy, and Scott Devlin, the Vitamin Shoppe's CIO, showcased how AI is reinventing product search and personalization. With the prediction that 20% of U.S. and EMEA retailers will launch customer-facing AI this year, we are in line with the industry's pulse. Let's navigate retail innovation together as we empower our clients to confidently thrive in the AI era.

[Cesar Gon, Founder and CEO at CI&T]

GenAI Pulse is our quarterly thought-provoking paper that offers a glimpse into the future with real insights from leading brands already living in the era of AI.

[Cesar Gon, Founder and CEO at CI&T]

Since its beginning, the publication has shown the transformation in enterprise through the rise of generative AI in modern business applications. Get your free download today and be ready for the next chapters of GenAI Pulse.

[Cesar Gon, Founder and CEO at CI&T]

Over 70,000 attendees participated in the Web Summit 2024, where we shared insights on AI transformation. Bruno, our Co-Founder and President, gave a keynote on preparing for the AI tsunami, with insights for companies on how to start and thrive with AI strategies and key lessons from our journey to 80% GenAI adoption.

[Cesar Gon, Founder and CEO at CI&T]

To start where you can create impact fast, where you can create impact fastest, the more safe way.

[Cesar Gon, Founder and CEO at CI&T]

At the Corporate Innovation Summit, Paula, CEO of Box 1824, and our EVP Solange led discussions on overcoming innovation hurdles. This is our commitment: help businesses to navigate this new era.

[Cesar Gon, Founder and CEO at CI&T]

Following the success of the Brazilian edition of CI&T's Next Gen Internship Program, we are excited to announce that applications are now open for the Colombian edition. Let's continue developing the first generation of AI-native coders.

[Cesar Gon, Founder and CEO at CI&T]

I hope these stories illustrate the impact we create for our clients. Now, I would like to invite Bruno to share insights on our global delivery model, the evolution of CI&T Flow, and our talented strategy.

[Bruno Guicardi, President for North America and Europe at CI&T]

Thank you, Cesar. Good evening, everyone. It's a pleasure to be here once again. We've finished the year with over 6,900 CI&Ters, reflecting a 13% year-over-year growth. We have been utilizing AI to enhance our onboarding and training processes, which has been key in maintaining a strong utilization rate throughout the year. In 2024, we focused on promoting from within, cultivating a dynamic culture of opportunity, and empowering our teams to grow and embrace new challenges. As a result, our voluntary attrition rate stands at 10.7%, while the leadership attrition rate remains very healthy at 3.5%. As we enter 2025, we are excited to welcome 450 new trainees, reinforcing our commitment to strengthening our team and cultivating the next generation of technology leaders. This program enriches our organizational culture and prepares the AI professionals of the present.

[Bruno Guicardi, President for North America and Europe at CI&T]

We have had over 10,000 applications, and we will develop the first generation of AI-native coders. Another group will also join us in Colombia in the second half of this year, broadening learning and growth opportunities for young talents in the region. Now, let me comment on one of our AI-powered offerings, which has been a key driver of our recent revenue growth. In 2024, the role of AI in application modernization has evolved from being a nice-to-have to an essential tool for success. Legacy platforms slowed down agility and are hurdles to innovation, and our clients are turning to AI to overcome those challenges. AI brings great value to modernization efforts, greatly reducing risk and errors while increasing efficiency and speed in the process. Our clients are seeing exponential reductions in modernization timelines, enabling them to accelerate time to value and stay ahead of their competition.

[Bruno Guicardi, President for North America and Europe at CI&T]

We are at the forefront of this transformation with our CI&T Flow platform, which modernizes legacy systems and unlocks innovation. Through generative AI, CI&T Flow is driving significant efficiencies and speed gains. The platform minimizes risks by automating error-prone, time-intensive tasks and ensures reliability when migrating old systems to modern application architectures. Our AI-powered modernization solutions are contributing to stronger sales pipelines and revenue growth, as more clients recognize the need to replace outdated systems that are killing efficiency. Now, let me hand it over to Stanley to comment on our financial results.

[Stanley Rodrigues, CFO at CI&T]

Thank you, Bruno, and good afternoon, everyone. I'm pleased to share our financial performance for the fourth quarter and full year 2024. In the fourth quarter of 2024, our net revenue achieved a record BRL 656.5 million, reflecting a 25.6% increase compared to the fourth quarter of 2023. On a constant currency basis, our net revenue grew a robust 14.7% year-over-year. This strong double-digit organic revenue growth exceeds industry averages, underscoring our competitive position and operational effectiveness. For the full year 2024, our net revenue totaled BRL 2,368 million, marking a 6% increase year-on-year. Net revenue at constant currency increased by 1.3% compared to 2023. In 2024, net revenue from North America grew by 7.5% compared to 2023, driven by the successful expansion of large clients that we onboarded in recent years. In Latin America, revenue increased by 6.2% year-over-year, largely supported by clients in the financial services vertical.

[Stanley Rodrigues, CFO at CI&T]

When analyzing our revenue by industry vertical, we saw particularly robust growth in the retail and industrial goods sectors, which recorded an impressive 70% year-over-year increase. Revenue from the consumer goods sector rose by 14.9% compared to 2023. Additionally, revenue from financial services increased by 5.7% in 2024, primarily driven by our clients in Latin America. For the full year, our top client and top 10 clients accounted for 8% and 41% of our net revenue, respectively. At CI&T, we aim to be the partner of choice for our clients, scaling our engagements as they mature to expand wallet share and foster long-term partnerships. In 2024, our focus has been on organic revenue growth and optimizing our client base by targeting large accounts with significant technology investments. Our top 10 clients, each generating a minimum of $10 million in revenue, experienced a year-over-year revenue growth of 9.7% in 2024.

[Stanley Rodrigues, CFO at CI&T]

This increase underscores the efficiency and value we provide to our largest clients. We are particularly excited about the onboarding of new large clients with long-term commitments in the digital space. Our strong pipeline and conversion rates affirm that we are on the right path. Moving on to our financial metrics. In the fourth quarter of 2024, our adjusted EBITDA reached BRL 128 million, reflecting a 23.7% increase year-over-year, with an adjusted EBITDA margin of 19.5%. For the full year, adjusted EBITDA totaled BRL 442 million, a 2.4% increase compared to 2023, resulting in an adjusted EBITDA margin of 18.7%. We have been diligent in managing costs and expenses, allowing us to enhance our sales initiatives while effectively diluting general and administrative expenses. As a result, we have consistently delivered strong profitability metrics in recent years.

[Stanley Rodrigues, CFO at CI&T]

In the fourth quarter of 2024, our adjusted net profit reached BRL 78 million, reflecting a 41.3% increase compared to the same period in 2023. The adjusted net profit margin improved from 10.6%-11.9% in the fourth quarter of 2024. For the entire year, our adjusted net profit was BRL 241.8 million, an 8.9% increase from 2023, with the net profit margin reaching 10.2%. This improvement was primarily driven by a reduction in net financial expenses, given the lower net debt position and a lower income tax rate. In 2024, we generated BRL 467 million from our operating activities, a 12.7% increase from the previous year, primarily due to improved working capital management. This translates to a cash conversion to adjusted EBITDA ratio of 105%, underscoring our strong capacity to generate cash from organic operations.

[Stanley Rodrigues, CFO at CI&T]

Our free cash flow, defined as net cash from operating activities less CapEx, reached BRL 317 million in 2024, up 16.9% compared to 2023, representing a free cash flow conversion to adjusted net income ratio of 131%. This robust cash generation enables us to pursue strategic priorities to accelerate our growth. Before I pass it over to Cesar to discuss our business outlook, I want to provide an update on a commitment we made earlier this year in the first quarter 2024. Starting with our 2024 annual report on Form 20-F, we will be transitioning our presentation currency from Brazilian reais to US dollars. This change aims to better align our financial reporting with the global nature of our business operations and support our growth strategy as we continue to expand our presence in key markets. Cesar, back to you.

[Cesar Gon, Founder and CEO at CI&T]

Thank you, Stanley. Before diving into our business outlook, let me first provide a recap of our growth trajectory in 2024. We set out to achieve consistent sequential growth, overcoming the challenges of 2023. Our unique AI approach and CI&T Flow were key drivers, accelerating our recovery and positioning us for sustainable expansion. As we close the year, we are proud to have delivered on this commitment and setting a strong exit rate for continued growth in 2025 and beyond. Now, let me comment on our business outlook. For the first quarter of 2025, we expect net revenue of at least $110.5 million, reflecting a 12.6% year-over-year growth at constant currency. This outlook corresponds to a 4.5% growth in US dollars and 23.7% in Brazilian reais, as we expect Q1 to mark the peak of FX impact throughout 2025, based on the volatility curve of 2024.

[Cesar Gon, Founder and CEO at CI&T]

For the full year of 2025, we project organic net revenue growth at constant currency in the range of 9%-15% year-over-year. The midpoint of this range of 12% translates to an 8.4% increase in US dollars and a 16.8% growth in Brazilian reais. In addition, we estimate our adjusted EBITDA margin for 2025 to be in the range of 18%-20%. To conclude, I want to express my deep appreciation for our team's dedication and resilience. The way you have embraced our AI-first transformation over the past two years is truly extraordinary. Together, we will continue to navigate change and drive CI&T forward, shaping a future defined by innovation, collaboration, and impact. This brings us to the end of our presentation. We may now begin the Q&A session.

[Eduardo Galvão, Director of Investor Relations at CI&T]

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. When you're done, please mute your line. The first question comes from Puneet Jain from JPMorgan. Hi, Puneet, please go ahead.

[Puneet Jain, Associate Equity Research at JPMorgan]

Hey, thanks for taking my question and good quarter. Let me ask Cesar, like there have been like a lot of concerns around like the geopolitical macro news over the last few months. Are you seeing any pause or any caution in your client spending over the last few months? If yes, then are there any differences in your outlook across the U.S. versus other regions like Brazil or Europe?

[Cesar Gon, Founder and CEO at CI&T]

Thank you, Puneet. First, and thank you for your question. Overall, we continue to see, let's say, stable demand from our cohort that is particularly large, very large organizations, despite this ongoing macro uncertainty and even the recent discussions around tariffs. Stability is good for us because it's a favorable environment for our strategy of replacing underperforming competitors with our AI-driven solutions. One point that I continue to see is a shift toward AI-driven solutions, reinforcing our focus on AI. To give you a data point, right now we have a stronger pipeline compared to the same period of last year, roughly 30% higher. This is for me, is a promising leading indicator for 2025. We continue to be cautious, but in our cohort of clients, we see stability.

[Puneet Jain, Associate Equity Research at JPMorgan]

No incremental delays or pause in your pipeline?

[Cesar Gon, Founder and CEO at CI&T]

Not yet.

[Puneet Jain, Associate Equity Research at JPMorgan]

Good. That's good to know. Can you review your use of cash? Like it's been a while since you pursued, you completed an M&A. Your peers have been very acquisitive, adding assets in data, AI, one of the strategic areas that you mentioned. Can you share like what should we expect for use of cash in 2025?

[Cesar Gon, Founder and CEO at CI&T]

Yeah, I can start and then Stanley can complement. First, I think we made a strategic decision to focus last year, 2024, on transforming CI&T into an AI-first company. I think this focus has been a key driver of our organic growth. By the way, organic growth has always been our primary value creation engine, and we will continue to be. Moving forward, we may resume M&A as a way to speed up our organic growth. Our focus would be targets that help us to expand, particularly in the US, leveraging our near-shore capabilities in Brazil and Colombia, and adding new high-potential clients to our portfolio. Regarding capital allocation, Stanley, you want to complement that?

[Stanley Rodrigues, CFO at CI&T]

Yes, Puneet, additionally to any M&A that may happen in the near future, we are continuing our investments towards R&D, meaning our AI platform flow, which, as Cesar mentioned, has been delivering outstanding results. Driving efficiency, leveraging our growth. Of course, we will continue investing in that. Also, given the high cash generation we project for this year, we also see that a good way to provide return to shareholders is via share buybacks. Preventing dilution from stock options, compensation, or even increasing earnings per share, for example. We also are prioritizing paying down debt, reducing interest payments. I would say those are the main items.

[Puneet Jain, Associate Equity Research at JPMorgan]

Okay, thank you. Good luck.

[Eduardo Galvão, Director of Investor Relations at CI&T]

Thank you, Puneet. The next question comes from Vitor Tomita from Goldman Sachs. Vitor, your line is open.

[Vitor Tomita, Equity Research VP at Goldman Sachs]

Hello, and thanks for taking our questions. I have two questions from my side. The first one is a bit of a follow-up on the question by Puneet on cash deployments. You also enlarged quite a bit your sales capabilities in 2024 with more dedicated sales teams. Should we see the level of selling expenses and sales investment in Q4 as a good guide for 2025, or do you see room to invest further in customer acquisition to further boost the growth as well? Our second question would be related to capacity utilization. If you could give us a bit more color on how that is trending at the moment. I recall from the opening statement that you mentioned it was strong, going well, but if you could give us a bit more color on that, it would be great. Thank you.

[Cesar Gon, Founder and CEO at CI&T]

Thank you, Vitor. I will start with the first question, and then Bruno can handle the second one. Yeah, you are right. In the last couple of years, we have been enhancing and expanding our sales structure and our sales approach across all four regions we operate. We will continue this process. It's paying off. I think we have a much more strong pipeline and commercial pipeline and visibility due to, of course, our effort and differentiation around AI and Flow, but also a more proactive and intense sales effort. In general terms, you will continue to see increasing investment around sales, and of course, take advantage of the efficiency we are gaining with AI and also diluting our G&A expense as we expand. Bruno, can you handle the second part of?

[Bruno Guicardi, President for North America and Europe at CI&T]

Your question was around utilization rate, right, Vitor?

[Cesar Gon, Founder and CEO at CI&T]

Yes.

[Vitor Tomita, Equity Research VP at Goldman Sachs]

Yes.

[Eduardo Galvão, Director of Investor Relations at CI&T]

We estimate utilization rate to keep at a very strong level as we finished Q4. We see good levels of utilization rate between 85%-89%, and there is a natural oscillation there, a seasonal oscillation over the quarters, but that is what we estimate to be in 2025 as well. We do not see any differences there coming from 2024.

[Vitor Tomita, Equity Research VP at Goldman Sachs]

Very clear. Thank you very much.

[Eduardo Galvão, Director of Investor Relations at CI&T]

Thank you, Vitor. Our next question comes from Thiago Kapulskis from Itaú. Thiago, go ahead.

[Thiago Kapulskis, Head of Global TMT Sell-Side Research at Itaú]

Hi, everyone. Thanks a lot for the opportunity to ask questions. I have two questions as well, and all related to the guidance, right? Just want to get a little bit more sense of the puts and takes in the full-year guidance. In the Q1, you guided for a dollar of 5.80, 80 something. Just want to understand if you have the same assumptions for the dollar, which has been very volatile, right, during this period over the past few months. Also trying to understand a little bit if you are what you're considering in terms of activity in the United States, more specifically, right, given one of the questions that is happening here. Anything, any color would be interesting. Also one very last point as well.

[Thiago Kapulskis, Head of Global TMT Sell-Side Research at Itaú]

If you could give us color on the organic growth involved on that guidance, that would be interesting as well. Thank you.

[Cesar Gon, Founder and CEO at CI&T]

Can you start, Stanley? I can complement.

[Stanley Rodrigues, CFO at CI&T]

Go there, go there.

[Cesar Gon, Founder and CEO at CI&T]

No, you can start.

[Stanley Rodrigues, CFO at CI&T]

Okay, yeah. Thank you, Thiago, for the questions. With regard to FX, as Cesar mentioned in the voiceover, we understand that we are at the peak of that scenario of devaluation of reais. For 2025, we are considering that stabilization. Of course, given that we have our business continue to have a mix of different currencies underneath, right? We have reais, we have US dollars and hard currencies in the top line, while we have a different mix in the cost. Those are not changing, and that is why we are always guiding using the constant currency, which better translates the actual increments on the business. With regard to the guidance we are providing, 12% constant currency for the full year is fully organic growth, right? Cesar, if you want to add there.

[Cesar Gon, Founder and CEO at CI&T]

Sure. In terms of regions, we are guiding very strong growth in our two main regions, North America and Latin America, mainly the U.S. and Brazil, and more stable outlook for Europe, mainly due to cautions regarding geopolitical and macro, and a good expansion in Asia-Pacific too. Mainly our two main regions, the larger region will be driving our growth.

[Thiago Kapulskis, Head of Global TMT Sell-Side Research at Itaú]

Sounds good. Thank you very much for the answers, guys.

[Eduardo Galvão, Director of Investor Relations at CI&T]

Thanks, Thiago. Our next question comes from Bryan Bergin from TD Cowen. Brian, please go ahead.

[Bryan Bergin, Managing Director at TD Cowen]

Hey, guys, good afternoon. Thank you. First question on the outlook for 2025, and really kind of the shape of the year. You know, we see where we're guiding for first quarter, nearly at the midpoint of that constant currency range for the full year, you know, 12 plus. I'm curious, as you go through Q2 to Q4, as we think about cadence of 2025, is there anything that is an important consideration? At the same time too, when you think about your 2025 guide visibility, do you have a sense of what's contractually committed versus what you have to still go get in pipeline?

[Cesar Gon, Founder and CEO at CI&T]

Okay, thanks, Bryan. Basically, I think we are consistent with our historical growth engine. In seasonality, we are projecting a solid Q1 with a good year-over-year constant currency growth, 12.6%. We are forecasting to continue our sequential expansion from Q2 onward at a very good pace. Regarding the visibility, we have good visibility. We are working with a reasonable range in our full-year guidance. We consider that we are very conservative, but in a good way, also counting on a very strong commercial pipeline, as I mentioned before. Good visibility, but some cautions regarding maybe an intensified volatility. The top range of our guidance is driven by our solid commercial pipeline, while the low range reflects caution in case of intensified macro volatility.

[Bryan Bergin, Managing Director at TD Cowen]

Okay, okay, very good. The second question here is on GenAI impact in client engagement. Where you are further along in the usage of GenAI and agentic solutions in your delivery, how is that impacting the commercial or the contracting terms in those engagements? Is it different than what you've seen historically? Maybe just give us some color there.

[Cesar Gon, Founder and CEO at CI&T]

Sure, Bryan. I think as expected, AI is progressively becoming embedded in all aspects of digital project development now, whatever for efficiency, for customer experience, or even for data and decision-making. What we see in our demand is, I would say half of our demand is applying AI for speed-up legacy and application modernization, cloud migration, several data engagements, like preparing the foundation to a future AI-driven world. The second part, the second half of the demand is about improving customer experience journeys for consumers now with the new possibilities around AI, designing and building new digital products, and also a growing number of use cases using GenAI, focus on hyper-personalization, like the ones we showcased during our presentation. Half we classify of the demand based on AI, we classify as horizontal demand, and half we classify as vertical demand.

[Cesar Gon, Founder and CEO at CI&T]

I believe that will remain along the year.

[Bryan Bergin, Managing Director at TD Cowen]

All right, thank you, guys.

[Eduardo Galvão, Director of Investor Relations at CI&T]

Thanks, Bryan. Our next question comes from Ernesto Gonzalez from Morgan Stanley. Hi, Ernesto.

[Ernesto Gonzalez, Equity Research at Morgan Stanley]

Hi, thank you for taking our question. It's one on our end. We saw some slight sequential weakness in North America and a little bit more in Europe. Could you please walk us through what you saw in each of those markets right up to the third quarter? Thank you.

[Bruno Guicardi, President for North America and Europe at CI&T]

I can take that one. In Europe, as Cesar mentioned before, we're seeing the, I think, being shaped by the current geopolitical and economic environment in Europe that's been dealing since the beginning of 2024. North America is just regular seasonality and volatility, but it's small. We don't consider that critical going forward to 2025. As we mentioned, we're going to get a strong growth coming from that region. That's our biggest region at this point.

[Ernesto Gonzalez, Equity Research at Morgan Stanley]

Clear, thank you.

[Eduardo Galvão, Director of Investor Relations at CI&T]

Thanks, Ernesto. Our next question comes from Gustavo Farias from UBS. Gustavo, go ahead.

[Gustavo Farias, Associate Director at UBS]

Hi guys, can you hear me?

[Cesar Gon, Founder and CEO at CI&T]

Yes.

[Gustavo Farias, Associate Director at UBS]

Yes. Good night. Thanks for taking my questions. I have two on my end. The first one regarding specifically some new legislation in Brazil impacting Latam. If you could comment on the effects of the return of payroll taxes and how you are seeing the reactions from clients, if you are being able to pass through this to prices, and to what extent this is embedded in your guidance for 2025. My second question regarding what Cesar mentioned about AI-related projects, efficiency-related versus more client-facing projects, let's call it. What kind of scenario of those profile of projects, AI-related projects, are you considering for 2025? How are you seeing this evolving going forward? Thank you.

[Stanley Rodrigues, CFO at CI&T]

I may take the first question. Gustavo, thank you. Thank you for the question. With regard to payroll taxation in Brazil, it started in 2025, and this is a program that will progress, increasing the tax for four years, up through 2028, right? This gradual approach allowed us to prepare proactively and engage in discussions with our clients in advance. We are fully committed in minimizing this impact through productivity gains and cost-saving measures. We are really on track to deliver our EBITDA margin that we guided, that is 18%-20% in 2025. Meaning that, with your point, we are fully considering those aspects already in our guidance. Meaning that we, through all those initiatives I mentioned, we are already dealing with this change in Brazil with no impact.

[Bruno Guicardi, Co-Founder and President at CI&T]

I can take the second one on the profile of the demand. Gustavo, thanks for the question because that's, I think it's a big opportunity for us there, right? One could think that I know that there's a small amount of infrastructure that needs to be done to prepare for this new world of AI, right? In terms of data and applications. The reality is that there's just a massive amount of backlog there. Our clients still have data and applications sitting in a very old infrastructure that needs to be modernized in order for them to actually really accelerate towards a GenAI future. That profile, I think, will give us a couple of years of demand in terms of just the preparation infrastructure needed to be put in place for that future. I don't see that profile changing very fast going forward.

[Bruno Guicardi, Co-Founder and President at CI&T]

That's to make it simple.

[Gustavo Farias, Associate Director at UBS]

All right, thanks for the answers. Congrats on the results.

[Bruno Guicardi, President for North America and Europe at CI&T]

Thank you.

[Eduardo Galvão, Director of Investor Relations at CI&T]

Thank you, Gustavo.

[Eduardo Galvão, Director of Investor Relations at CI&T]

Thanks, Gustavo. That concludes our Q&A session. I'll now invite Cesar to proceed with his closing remarks. Cesar.

[Cesar Gon, Founder and CEO at CI&T]

Thanks, Eduardo, Bruno, Stanley. Thank you all for joining us in our call. I'd like to extend my gratitude again to all CI&Ters across the globe for your hard work and achievement in this quarter. A special thank you to our clients for choosing CI&T as a partner to co-create in this exciting new chapter of AI-driven innovation. Stay well. See you.

Participants

Executives

• Bruno Guicardi, Co-Founder and President
• Cesar Gon, Founder and CEO
• Bruno Guicardi, President for North America and Europe
• Stanley Rodrigues, CFO
• Eduardo Galvão, Director of Investor Relations

Analysts

• Video Narrator 8
• Bryan Bergin, Managing Director at TD Cowen
• Video Narrator 2
• Video Narrator 7
• Video Narrator 4
• Puneet Jain, Associate Equity Research at JPMorgan
• Video Narrator 3
• Video Narrator 6
• Gustavo Farias, Associate Director at UBS
• Video Narrator 10
• Thiago Kapulskis, Head of Global TMT Sell-Side Research at Itaú
• Video Narrator 9
• Video Narrator 1
• Video Narrator 5
• Vitor Tomita, Equity Research VP at Goldman Sachs
• Ernesto Gonzalez, Equity Research at Morgan Stanley