CI&T Q3 2026 Earnings Results & Report

CI&T EPS Results

• Actual EPS: $0.09
• Consensus EPS: $0.0956
• Beat/Miss: Missed by -$0.0056
• One Year Ago EPS: N/A
• EPS Beat Rate: 3 of last 7 quarters

CI&T Revenue Results

• Actual Revenue: $146.30 million
• Expected Revenue: $146.15 million
• Beat/Miss: Beat by +$146.00 thousand
• YoY Revenue Growth: N/A

CI&T (NYSE:CINT) is a global technology and digital transformation company that helps organizations develop and improve digital products, services and operations. Its offerings include technology consulting, product design, software development, data and artificial intelligence solutions, cloud services and modernization of existing systems.

Founded in Brazil in 1995, the company serves clients across multiple industries and geographies, including North America, Latin America and Europe. CI&T works with organizations on initiatives ranging from digital strategy and customer experiences to the design and implementation of technology platforms.

Founder Cesar Gon is the company’s chief executive officer. CI&T is listed on the New York Stock Exchange under the symbol CINT.

CI&T Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: CI&T reported record Q3 revenue of $146.3 million, up 14.9% year over year and entirely organic, ahead of its outlook. Growth was broad-based: clients outside the top 10 grew 17.1%, faster than the 12.2% growth from its largest accounts.
• Positive Sentiment: Adjusted gross margin rose 420 basis points sequentially to 36.6%, with the company crediting AI-enabled productivity and a shift toward value-based pricing. Forty percent of new Q3 engagements used value-based models, which management said generate margins 8–10 percentage points above traditional time-and-material work on average.
• Negative Sentiment: Adjusted EBITDA increased 19.1% sequentially to $22.6 million, but fell 3.9% year over year, mainly due to the stronger Brazilian real; management said it would have grown 3.4% on an FX-neutral basis. The company also increased selling investment to support new offerings and growth, though it expects selling expenses as a share of revenue to decline from Q3 levels.
• Positive Sentiment: CI&T raised the low end of its full-year revenue outlook to $568 million and kept its adjusted EBITDA margin outlook at 15%–17%. Its Q4 revenue range implies slower growth, however, and management cited election-related budget timing and currency volatility; it said the pipeline is 50% larger than a year ago, but some deals may convert after 2026.

Presentation

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

Good afternoon, and thank you for joining us for CI&T’s Third Quarter of 2026 Earnings Call. I am Eduardo Galvão, Director of Investor Relations. Joining me today to discuss our quarterly results are Cesar Gon, our Founder and CEO, Bruno Guicardi, Founder and President, 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 are valid only as of the date when made. Additionally, we will discuss certain non-IFRS financial measures. We believe these provide a more comprehensive view of our underlying operation performance.

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

For a full reconciliation of these measures to the most directly comparable IFRS 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 will host a Q&A session. To participate, please submit your question via email to investors@ciandt.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 am pleased to hand the floor over to our Founder and CEO, Cesar Gon. Cesar, please.

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

Thank you, Eduardo, and good afternoon, everyone. This quarter, we delivered record revenue, our eighth consecutive quarter of double-digit organic growth. In a year of investment and transformation, that growth is now reaching our margins. Adjusted gross margin up 420 basis points and adjusted EBITDA margin up 220 basis points sequentially. Investors often ask us, “Why is CI&T growing when most of our industry is not? "Four reasons working together. First, founder-led execution. We run the company through autonomous growth units, close to our clients, with no layers of bureaucracy. That is how we move fast. Second, deep client context. Our largest clients have trusted us for decades, and that trust gives us what AI needs to work in production, deep knowledge of their business and operating model. It is hard to replicate. Third, we are a rare scaled AI player, and nimble.

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

All our offerings are built around AI deployment, delivered by 6,800 AI Builders with no legacy service lines to protect. Fourth, early AI multi-model by design. We launched CI&T FLOW in the first half of 2023, then reskilled our teams and redesigned our career tracks around AI, so the way we develop talent matches the way we now deliver. FLOW orchestrates the leading models, so our economics do not depend on which model wins. You will see these four reasons in our numbers today. Broad-based growth, a commercial model that pays us for what we deliver rather than for hours, and operating profit growing again quarter over quarter. CI&T puts AI into production at enterprise scale with measurable business outcomes. We delivered record revenue of $146.3 million, up 14.9% year-over-year, all organic, ahead of our guidance. The growth is broad-based.

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

Clients outside our top 10 grew 17.1%, faster than the 12.2% from our largest accounts. Our momentum does not depend on a few clients. What changed this quarter is how growth turns into margin. Adjusted gross profit margin reached 36.6%, up 420 basis points from the second quarter and 270 basis points year-over-year. The main driver is AI monetization. In the third quarter, 40% of our new engagements were signed under value-based commercial models, up from 30% in the first half. More and more, we are paid for what we deliver, not for the hours we bill. Operating profit follows. Adjusted EBITDA grew 19.1% sequentially, with margin expanding from 13.3% to 15.5%, even as we step up investment in our commercial engine. That was a deliberate choice for 2026. New offerings, new verticals, and scaling agentic SDLC across our clients.

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

It's already showing in our pipeline, now 50% larger than a year ago. Stanley will walk you through the details later in the call, including the currency effect. Two years of double-digit organic growth at constant currency. More important than the streak is what produces it. First, what we sell. We put AI into production in two ways: services with AI built in, like agentic software development and AI transformation, modernizing legacy systems and data, and redesigning how a business runs with agents. Second, who we grow with. Existing clients are expanding, and new logos are ramping across industries and regions. The best proof is in production. Here are a few examples with numbers attached.

[Video Narrator 1]

Kraft Heinz feeds millions of tables, but its sales team was hungry for more clarity. CI&T built Data.Mate, a copilot where machine learning turns raw data into the next best move. Active users grew 371%, and engagement grew 527%. 88% of sales executives adopted it, the people who drive a third of all revenue. In 2026, it took first place in AI at the Involves Awards. Because great sales, like great recipes, come down to the right ingredient at the right moment. CI&T and Kraft Heinz, together.

[Video Narrator 2]

The market keeps asking if AI actually works. We stopped answering in slides. We answer in production. More than 20 engagements, 15 industries across three continents, live at enterprise scale, inside 40-year-old monoliths and greenfield builds alike. 84% lower cost per unit in mobility, 90% less human effort in legal tech, 14 days to 15 minutes in automotive, configuration 20x faster in energy, all reinvented with agentic SDLC. It's a structural change of delivery. We turn access into capability, and capability into tenfold speed. The biggest numbers speak louder than the loudest market buzzwords. Explore more on our website. Seven days just to finish the financial close. Teams, systems, and data sources all waiting on each other, one calendar to tame. With us, Getnet, a global top 10 acquirer, planted Project Sequoia, governed data at the roots, one control layer for the whole close.

[Video Narrator 2]

AI agents validate and document every step. Seven days became two, up to 60% less operational effort. The people step in only for the exceptions. Now expanding to seven countries. Getnet and CI&T, deep roots growing across borders.

[Video Narrator 3]

Caldic is a global supplier of specialty ingredients to life sciences and industry. In Latin America, it grew by acquisition. Its data grew the same way, fast, just not in one place. Two ERPs, scattered platforms, a month-end close done by hand. We built a data factory on Databricks, governance in the formula. Close time dropped at least 30%. Finance stopped consolidating and started analyzing. Chemists call that a solution. So do CFOs.

[Video Narrator 4]

A quick recap of our quarter. First, our own stages. At the New York Stock Exchange, we hosted Impact AI with Anthropic, AWS, Mars, and Sonos to talk about what it really takes to make AI work at scale. Then a world first, the Lean AI Summit with Lean Institute Brasil. Ford, Itaú, Johnson & Johnson, and others shared AI-first cases built with CI&T and Box1824. Next came the AI Deployment Room, 30-plus C-levels on one question: how to deploy AI at scale? The answers came from people already doing it. With Fundação Dom Cabral, we launched the second edition of the AI Lighthouse Awards, recognizing companies whose AI maturity shows up in actual results. Now, the stages we stepped onto. At Big Data London, we moved the conversation from what AI can do to how to make it work inside the business.

[Video Narrator 4]

At Databricks World Tour in Singapore and São Paulo, we showed data and AI running in production alongside great partners. In a webinar with Craig Le Clair, VP and Principal Analyst at Forrester, our co-founder, Bruno Guicardi, explored agents and the future of work, why most never escape proof-of-concept purgatory, and how a few trailblazers are leading the way out. That is our quarter. See more on our website.

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

Bruno will now show you what this means in productivity, revenue growing faster than our team. Bruno, I hand it over to you.

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

Thank you, Cesar. Good afternoon, everyone. The clearest measure of our new model is revenue per AI builder. On a last 12-month basis, it reached $82.5 thousand, up 10% year-over-year, an acceleration from 7% last quarter. What drives it is simple. We closed the third quarter with about the same number of AI builders as a year ago, while revenue grew 14.9%, as our people now deliver more with AI. Our revenue no longer moves one-to-one with headcount. With our new commercial models, we are paid for what we deliver, not for the hours we bill, and that's what lifts our gross margin. The team is stable. Voluntary attrition was 9.9%, among the lowest in our history. Let me give you an example of one of our offerings that turns AI into measurable results: Decision Intelligence. Our clients have built strong data and analytics foundations.

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

Analytics tells them what will probably happen. Decision Intelligence takes the next step. It turns that prediction into a decision made at the right time. It closes the loop. A model detects a signal, business rules shape the recommendation, a person approves, and the action runs directly into the client's operational systems. Every outcome feeds the next decision, and people stay in command. Clients start with a human approving every decision and give the system more autonomy only as trust builds, with every step auditable. To deliver outcomes like this, clients need the best model for each problem, not a model their provider needs to sell. That's why we are multi-model by design and why the model builders want to work with us. Three months after joining the Claude Partner Network, we reached the Preferred tier in the services track.

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

That tier is earned with certified delivery team, Claude use cases delivered for clients, and public customer references. We have more than 50 major projects underway with Claude across software engineering, customer service, and user experience for global clients such as Stretto and Vanguard. We use it ourselves first. Claude Code runs extensively within CI&T FLOW, so we bring clients lessons learned from our own adoption, integration, and scale. in October, we also became a launch partner in the SpaceX Super Intelligence Partner Network, adding Grok to the models orchestrated by CI&T FLOW, alongside Mistral and the hyperscalers. Even the companies that build the models need partners to make AI work inside the enterprise. That's the layer where CI&T operates. With that, I will hand it over to Stanley to walk us through how our delivery engine shows up in our numbers.

[Stanley Rodrigues, CFO at CI&T]

Thank you, Bruno, and good afternoon, everyone. Revenue reached a record $146.3 million, up 14.9% year-over-year, entirely organic, and ahead of our outlook of at least $145.7 million. At constant currency, revenue grew 11.2%. For the first nine months, revenue reached $425.7 million, up 19.8%, or 13.6% at constant currency. Let me show you where that growth came from. By region, Latin America led at 20%, followed by new markets at 17.6%. North America grew 8.7% year-over-year, and its momentum is building. Revenue in North America grew 3.9% from the second quarter, the fastest sequential growth among our three regions. By industry, financial services, our largest vertical, grew 26.1%, and technology and telecom, 40.2%. By client, revenue from clients outside our top 10 grew 17.1%, ahead of the 12.2% from our 10 largest accounts.

[Stanley Rodrigues, CFO at CI&T]

That is the third consecutive quarter in which our broader base grows faster than our largest clients. We are adding new clients, and our offerings are reaching more of the accounts we already serve. Our growth does not depend on a few large relationships. Last quarter, we said AI monetization would expand our gross margin. This quarter, it did. Adjusted gross profit reached $53.5 million, up 24% year-over-year and 15.8% sequentially, growing well ahead of revenue. Adjusted gross margin reached 36.6%, up 270 basis points year-over-year, our first year-over-year expansion of 2026, even with the stronger Brazilian real and the payroll tax resumption imposing headwinds. There is a concern in our industry that AI productivity challenges revenue when paid by the hour, but it is not how we are increasingly being paid.

[Stanley Rodrigues, CFO at CI&T]

In our value-based models, we are paid for output and outcomes, so instead of a discount, productivity becomes margin. That is why 40% of the new engagements we signed this quarter are value-based, up from 30% in the first half. CI&T FLOW let us deliver more with the same team. Our cost of service grew 10.9%, below revenue growth of 14.9%. AI makes us more productive. Our commercial model let us and our clients share the value. Last quarter, we said we expected our adjusted EBITDA margin to improve sequentially. It did. Adjusted EBITDA reached $22.6 million, up 19.1% from the second quarter, with margin expanding from 13.3% to 15.5%. Year-over-year, adjusted EBITDA was 3.9% lower because of the stronger Brazilian real. On an FX neutral basis, it would have been $24.3 million, up 3.4% from the third quarter of 2025, with a 17.2% margin.

[Stanley Rodrigues, CFO at CI&T]

Excluding currency, our EBITDA is already growing while we keep investing in growth. This expansion came even as we stepped up investment in our sales engine. Selling expenses were 14% of revenue, up from 11.9% in the second quarter. That reflects the structural expansion of our commercial organization for new offerings and verticals, and the targeted investment to scale our agentic SDLC initiative, which we concluded this quarter. From here, we expect selling expenses as a percentage of revenue to decline from third-quarter levels. Those investments are already paying off. Our pipeline is 50% larger than a year ago, and we are adding new clients. At the same time, general and administrative expenses fell to 10.2% of revenue from 11.3% in the second quarter and 11% a year ago, delivering operating leverage across the rest of our structure.

[Stanley Rodrigues, CFO at CI&T]

Moving to the bottom line, adjusted profit was $11.5 million, up 2% year-over-year, and adjusted diluted earnings per share was $0.09, up 4.5%. Earnings per share grew faster than profit because of our capital allocation. We repurchased $2.9 million in shares this quarter and $9.1 million year to date, and our weighted average diluted share count is 2.4% lower than a year ago. We buy back our own shares because we believe in the value we are building. Cash generation remains strong. Operating cash flow was $22.4 million in the quarter, nearly 100% of adjusted EBITDA. With that, I will turn the call back to Cesar for our business outlook.

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

Thanks, Stanley. For the fourth quarter, we expect revenue in the range of $142.3 million-$152.0 million. At the midpoint, that is a 9.6% growth in U.S. dollars, or 9.3% at constant currency, against our strongest comparison base of 2025. The range reflects Brazil and the United States, our two largest markets, coming out of election cycles. Clients are setting new budgets, and currencies are more volatile. Demand is strong. Our pipeline is 50% larger than a year ago. The question is when demand converts, not whether it does. For the full year, we are raising the low end of our revenue outlook to $568 million, with a range up to $578 million, or 16%-18% organic growth.

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

Our revised outlook includes a positive FX impact of approximately 450 basis points, and we continue to expect adjusted EBITDA margin in the range of 15%-17%. This quarter showed that our model works. We said gross margin would expand, and it expanded 420 basis points. We said EBITDA margin would improve, and it improved 220 basis points. Revenue is growing faster than our team, and our broad client base is growing faster than our largest accounts. We close 2026 with a strong model and a large pipeline, well-positioned for 2027. We put AI into production for large enterprises, and increasingly, our clients pay us for outcomes, not hours. I want to thank our clients for their trust and every CI&T for the energy and talent behind these results. With that, we are ready to begin the Q&A session. Thank you.

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

All right. We will now begin the Q&A session. I will announce each participant's name. Once you hear your name, please unmute your line and ask your question. Then, when you are done, please mute your line. The first question comes from Gates Schwarzmann from TD Cowen. Hi, Gates.

[Gates Schwarzmann, Analyst at TD Cowen]

Hey. Thank you for taking my questions for Bryan Bergin today. You guys had mentioned the 50% growth in the pipeline this quarter. That is an uptick from 40% last quarter. Can you help us parse out what are some of the underlying trends between what is core pipeline growth in Agentic SDLC versus maybe more of your traditional digital engagements? Additionally, you have seen some good growth here in the top client cohort. Just curious if, through both of these pipeline and top client growth, do you have any visibility now into next year, any sort of early considerations in terms of growth levels? Thank you.

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

Thanks, Gates. I can start with your questions. First, yeah, we disclosed that

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

In this third quarter, 40% of our new sales were already in new value-based commercial models. An additional data point is, for new clients, this number goes to 75%. For every single new sales for new clients, we are being able to basically convert to the new value-based commercial models. That is the first big news in terms of the demand and our ability to convert the pricing model. In terms of demand type, we are using this model of three type of demand. The first is AI-enabled services, basically Agentic SDLC. That is probably half of what we are selling now. The second is AI transformation. That is a package that includes modernization, data, including ontology, Decision Intelligence, and so on. This is basically going ahead and move, preparing the company for AI transformation.

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

Then we have recently launched what I consider the crown jewel of our offerings. That is the agentic reinvention, the business reinvention with AI. That is the most transformative offering, and we are getting a very good traction in this first two quarters of launching this new offering. The trend is companies are combining, preparing, enabling the services with Agentic SDLC, a lot of traction with our AI transformation offerings, and an initial attraction for the new agentic business reinvention. That probably will be more relevant in 2027. By now, you ask regarding, we have a good, very strong pipeline, 50% larger than the same period last year. We are foreseeing a very good year ahead, but by now, we are focused on our Q4, and we will be back here in the next call to give you details about what we are forecasting for 2027.

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

I think, if I can compliment you, ask about how much of bookings we already have for next year. Remember, most of our growth comes from the portfolio clients. Very little, usually less than 10% of the year comes from new logos and land activity. We do have visibility into most of what we are going to do in 2027.

[Gates Schwarzmann, Analyst at TD Cowen]

Understood. One more on my end. A lot of moving parts with gross margin this quarter. Can you maybe help unpack some of those moving parts? You have gone over FX, just saying we know that some of those investments also in agentic SDLC stopped this quarter. Can you help unpack maybe how we should expect SG&A and gross margin to trend in the coming quarters, especially now as you take more and more engineers to 10x productivity to 20x productivity, et cetera?

[Stanley Rodrigues, CFO at CI&T]

Gates, thank you for the question. Gross margin, we have two major factors there. First one is FX, as you mentioned. The other is the deliberate investments we are making towards sales and agentic SDLC. Let us unpack this. The FX, simple, 170 basis points. If you compare the year-over-year margins, we dropped 300 basis points. Out of those 300, 170 is with regard to FX. The other 130, that is derived mainly from the investments. Within that number, we have a bunch of things. For example, first, the movements we are making towards adding value-based commercial models. This has been added. You may see, for example, revenue per headcount improving by 10%. You see, for example, we grew 14.9% in sales while we grew only 1.8% in headcount in that period.

[Stanley Rodrigues, CFO at CI&T]

Also, we have built in there, we have a payroll tax resumption in Brazil, which is a headwind. Of course, the sales and agentic SDLC by themselves represents 600 basis points. We have G&A operating leverage helping as well there. All combined into those 130 basis points there. Sequentially, we have a gross margin improving by 19.1%, which is 220 basis points, and 160 basis points, if you would, in FX neutral. That trend will continue. You mentioned what we should expect, right, with regard margins. You should expect this incremental presence in our mix of those new models, new commercial models, and also slowly that migration from traditional time and material into those new models. That will reflect in the margins. Also, the operating leverage on both the G&A and also sales, you should expect that thing happening towards the future. Mainly those elements.

[Gates Schwarzmann, Analyst at TD Cowen]

Understood. Thank you.

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

Thank you, Gates. The next question comes from Gustavo Farias from UBS. Hi, Gustavo.

[Gustavo Farias, Analyst at UBS]

Hi, everyone. Thanks for taking my questions. Two things on my side. First of all, if you could comment about the partnerships, the several partnerships that you guys have, Anthropic, Mistral, and all the others, how that has been performing so far, how much of it, if any, has already contributed in this quarter, or if we should expect it to kick in further in the future. The second one, if you could please update us on your capital allocation priorities for 2027. Thank you.

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

I can take the first one, and Stanley can take the second one. Partnerships has been increasingly important for us, Gustavo. Today, it's an important channel. All partners combined, they represent around 20% of the We measured this as we call partner attachment, like deals that have a partner, either that we brought the deal to the partner, we won together, or the partner brought it to us. So, 20% in 2026 is already with partners. So, it's a big increase comparatively to the last years, and I think we're just going to grow in 2027. Those partnerships with the Frontier Labs are more recent, and they're very exciting in terms of the types of opportunities that they're bringing. Not very relevant for the revenue in Q3 yet, but we hope that will be very relevant for the business generation in 2027.

[Stanley Rodrigues, CFO at CI&T]

Gustavo, can you repeat the question, please?

[Gustavo Farias, Analyst at UBS]

Of course. Just an update on your capital allocation priorities for 2027.

[Stanley Rodrigues, CFO at CI&T]

Okay, thank you. We, of course, first priority is to continue this trajectory on investments towards the combination of AI, new offerings, which is key for our future. We have been very successful in everything that we are doing and in our bets, so very assertive. That is the main priority. We have the opportunity to continue our share buyback program, which we continue to invest. Of course, growth itself demands capital. As we are growing, this is kind of automatically happening. We have been paying down debt as well. So, I would say those four items would be the. We are very selective towards M&A, for example. We are not very proactive in terms of thesis, but we do see opportunities here and there. If we see any opportunity, we may tackle those opportunity, right?

[Gustavo Farias, Analyst at UBS]

All right, very clear. Thank you.

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

Thanks, Gustavo. Our next question comes from Steven from Wedbush. Hi, Steve. Please go ahead.

[Steven Wahrhaftig, Analyst at Wedbush]

All right. Good evening, everybody. Thank you for taking the questions. I want to start off with the comments around the pipeline, because you mentioned that the pipeline is actually doing quite well. It is up 50% year-over-year. Can you talk about the breakdown between the new and existing clients of this pipeline? Is majority still coming from existing clients expanding their deals, as you mentioned on the call, or is there a lot of new logo traction? Then specifically when it comes to converting that pipeline, I mean, it seems like there is a lot of positive momentum there, but the organic growth is actually not heading in the right direction. It actually decelerated in the quarter, but we are still seeing a lot of positive momentum in the pipeline. Is there any issue with actually getting the deals to convert from the pipeline to revenue?

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

Thanks, Steven. Basically, we are seeing, of course, as a result of our increase in our sales effort, a very relevant increase in our sales pipeline, 50%. It is basically continued to follow 70% of this pipeline is from our current client base, and 30% are related to potential new clients. It is a larger pipeline, but following the same land and expand pattern as always. Regarding the conversion, I mentioned during my explanation that we just got out of two election cycles in Brazil and the U.S., so we kind of add some caution in forecasting. The visible effect is really FX volatility, a lot of volatility. As you know, we have a representative number in revenues in Brazilian real. That is explained the range we are forecasting Q4.

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

The pipeline is there, the conversion rate is in a max of our history, so it is going to convert. It is just a matter of when it is going to convert. We are kind of adding this layer of conservative because of this recent macro news. I think that we are very assertive that it always says that we are paying off and increasing our pipeline, and we will continue to have an amazing good conversion rate. I am sure we are in the right direction in terms of continue. Combining this with expanding our gross margin, that was the original plan, right? AI deployment for growth and AI monetization to increase our margins, and both things are working.

[Steven Wahrhaftig, Analyst at Wedbush]

Understood. If I can just squeeze one more in, because Stanley, I think from one of the answers you had for a different question, you mentioned that the employee headcount actually increased 2% year-over-year, which is a slower growth rate than we have seen over the past couple of quarters. Was that intentionally done? Was there anything that impacted you from hiring more sales capacity to accelerate that growth even further? Can you give us a little bit more color on what to expect moving forward?

[Stanley Rodrigues, CFO at CI&T]

Yeah. We may say it's intentional, as a consequence of everything that we are doing with AI, the way we are delivering, and everything that we are producing, in terms of services. So, it is a natural consequence as we improve, as I said, the value-based commercial models, they require less of that relationship that used to be one-to-one. Anything that would grow in revenue would grow in headcount. This is changing. So, it's intentional from the business perspective, and this is a natural consequence.

[Steven Wahrhaftig, Analyst at Wedbush]

Understood. Thank you.

[Stanley Rodrigues, CFO at CI&T]

Right.

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

Thanks, Steve. The next question comes from Luke Morison from Canaccord. Hey, Luke, please go ahead.

[Luke Morison, Analyst at Canaccord]

Hey, guys. Good to see you. Thanks for taking the questions here. I want to ask one that kind of tries to get at the relationship between sort of revenue growth from here and your gross margin expansion. I am wondering, as you are moving existing customers onto your value-based models, what happens to the size of that relationship? Does the client end up spending about the same with you and just getting more out of it? Are they giving you more budget because you are doing things more efficiently, and so they are taking spend that would otherwise go to competitors and spending more with you? Or do the savings you are delivering them come out of whatever is left in their budget? Basically, just trying to understand the extent that the higher margin comes with durable growth going forward.

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

Sure. Thanks for your question, Mike. Basically, the model for existing engagement was kind of deploy the productivity of the Agentic SDLC, and replacing some competitors or low-performance competitors, I would say. Basically, we try to keep the same volume, but getting more client share and expanding our margins and sharing part of the benefits with the clients. I think this was the main pattern of keeping the revenue, increase our margins, and also help our clients to get efficiency around the deployment of Agentic SDLC. We did across the board. We are still working on getting more client share by replacing non-AI or low-AI performance competitors. This is basically the strategy of moving, evolving to the value-based models, but not destroying or reducing the revenue level that we have.

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

Luke, if I can complement, if you think about how this industry works, it is like 80% of what our clients spend is just to keep the lights on and just the small enhancements and kind of keep compliance going. When they have the chance to actually do more and to actually innovate and partner with business areas and actually do things that actually they have been demanding for years, right? We call it playing on attack and start just playing defense, right? That is what our smartest clients are doing. They are just taking advantage that now things can do it. You can do things faster and cheaper, and do more, and stop playing defense, and doing more, in some cases, also capturing some client pocket share. Those are things that happen.

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

You are right, Bruno. Also very risky pre-AI. For example, legacy modernization was considered a very risky business before AI. Now, it is not just faster and cheaper, it is riskless. Because you have AI to understand the legacy business rules and update that. A lot of very complex things now are less risky, and the equation of return on investments are better. AI is kind of a positive force in terms of leveraging demand inside these large organizations.

[Luke Morison, Analyst at Canaccord]

Yeah. Okay. Helpful. Thank you. Then just maybe a follow-up. The model providers over the last few months, they have announced huge investments in various services-led initiatives and ventures. As you see that happening, and as those model providers build out their own deployment teams and partner initiatives, how do you see the economics and the share of business splitting between the labs and firms like yours?

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

Thank you for these questions, because this is probably the most amazing news for us. It proves that AI will increase AI deployment offering by any scale that no one is ready to fulfill. So, they are worried about the lack of AI deployment companies, and I think we have a scale AI deployment now in a number that is very rare in the industry. So, of course, the economics will converge. I do not believe the FTE levels these labs are promoting are sustainable. But the main concept that to deploy AI in a large organization is, first, it will demand a lot of specialized services. Second is a long-term journey. We have 10 years ahead of demand around AI deployment. And this is very, very good news for us as we foresee this opportunity almost four years ago.

[Luke Morison, Analyst at Canaccord]

Excellent. Thank you.

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

Thanks, Luke. The next question comes from Maria Clara Infantozzi. Hi, Clara.

[Maria Clara Infantozzi, Analyst at Itaú BBA]

Hi, guys. Thanks for the opportunity. I would like to explore a little bit more on how you see the pipeline evolving per geography, especially in Brazil. Can you please elaborate how clients' willingness on investing in AI have been evolving, especially taking into consideration the macro landscape? A second question related to engagement levels. Since you are noticing an improving productivity within the same clients, do you have any operational KPIs, such as churn, that could be shared with us so that we gain comfort that your retention rates keep improving? Thank you.

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

Thanks for the questions, Maria Clara. The first, I think it's too early. We have a very strong pipeline in Brazil, as in the U.S. Too early to measure the effect of the recent election. Let's see. I think somehow these investments are inevitable. For competitive reasons, companies cannot avoid capturing the efficiency and the differentiation opportunities around artificial intelligence. I think we've moved from the pilot moment in the industry for the production moment, and that will increase the competitive barrier in different industries and verticals, and that will lead to more demand around that. In the short term, maybe some delays, but so far, we don't have any concrete results, only the effects, the new level for Brazilian to U.S. dollar ratio. The second question is regarding churn. You mean client churn?

[Maria Clara Infantozzi, Analyst at Itaú BBA]

Yeah.

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

Yeah. Our retention is, we normally disclose the revenue retention rate annually. So, in the next quarter, we will provide the number for 2026. We don't see any meaningful variation. I think we continue with a very strong retention. That's why the majority of our growth continued to happen in our portfolio in the short term, and the new clients normally contribute for year two and year three as we expand. So the land expand engine continues to work, and we don't see any relevant difference around that.

[Maria Clara Infantozzi, Analyst at Itaú BBA]

Very clear. Thank you.

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

Thank you, Maria.

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

Thanks, Clara. Next question comes from Puneet Jain from JPMorgan. Hi, Puneet.

[Puneet Jain, Analyst at JPMorgan]

Hey. Thanks for taking my question. So, nice improvement in gross margins on sequential basis. My question is, how high your gross margins can go as the new models continue to improve and mix? In other words, how should we think about incremental margins at GM level on some of the new work you do?

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

Thank you, Puneet. I think our equation for gross margin improvement is less related to the capabilities of the models. I think we have a multi-model model where we can combine the best of breed for each kind of problem we are solving in terms of capabilities and costs. I think the equation is more related to our ability to continue to convert the commercial models. This is the main drive for improving our gross margin. Part of this equation is IP. As more intellectual property we have in our offerings, it clearly increases our ability to speed up the introduction of value-based models. I think there is a lot of room to continue improving our gross margin. This is, I think, what we are by design executing, company that can expand revenue and margins not in a linear way with headcount.

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

And this is already happening as our numbers are showing. I think there is still a lot of room for gross margin improvement based on commercial models and intellectual property delivery around.

[Puneet Jain, Analyst at JPMorgan]

Yeah. No, I am sorry. I should have clarified. When I said models, I meant like this new delivery.

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

Oh, okay. Okay. I thought you were referring to the LLMs.

[Puneet Jain, Analyst at JPMorgan]

Yeah, yeah. No. But is there a way to think about incremental margins, like the new work that is coming in under these models, delivery models? How much of GM is for those IP-based work or for some of these agentic SDLC and all those?

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

Yeah. Current number is, in average, we have 8%-10% of points above the old traditional time material models. It's very relevant.

[Puneet Jain, Analyst at JPMorgan]

Yeah.

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

It will continue to be. Of course, it's an equation of differentiation and our ability to

[Puneet Jain, Analyst at JPMorgan]

Yeah. No, that's amazing. That's good to know. Your fourth quarter guidance, the range was wider than usual. It's give or take about $10 million. What were the reasons for that? What can drive acceleration from 4Q levels into next year? You talk about some of those pilot projects and all those can come through. Elections are behind you in Brazil and midterms in U.S. How should we think about 2027 growth as it in relation to where you're going to exit in 4Q of this year?

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

For Q4, the low end is macro uncertainty and FX volatility. The high end is pipeline conversion. It's the best pipeline in our history, and we are sure we're going to convert a good chunk of it, but not sure if it's going to happen within 2026. Even though the prospect for next year is very good, as we believe we are kind of moving the pieces of our strategy, we have more offerings coming out of our differentiation strategy with more IP-based offerings. We have data evolving in an amazing way as a big part of our strategy. We have partnerships, as Bruno mentioned, evolving. It's around 20% of our sales, and it will increase for sure as we are, especially with this new partnership with Anthropic and other frontier models. A lot of things are moving the right direction.

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

Of course, we cannot anticipate our outlook for 2027. It will be the main topic of our next meeting here, for sure.

[Puneet Jain, Analyst at JPMorgan]

Okay. Thank you.

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

Thank you, Puneet.

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

Thanks, Puneet. That concludes our Q&A session. I will now invite Cesar Gon to proceed with his closing remarks.

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

Amazing, Galvão. Thank you, Galvão, Stanley, Eduardo. Thank you all for joining us today. To all CI&Ters, thanks for your hard work. To our clients, thank you for choosing CI&T as your partner for AI deployment. As a final note, we said AI would show up in our margins. It did. Same thing, more revenue, better economics. We are building a company that scales revenue faster than headcount and grows more profitable as our new conversion models mature. That is the main message here. Stay well. See you soon. Bye-bye.

Participants

Executives

• Eduardo Galvão, Director of Investor Relations
• Cesar Gon, Founder and CEO
• Bruno Guicardi, Founder and President
• Stanley Rodrigues, CFO

Analysts

• Video Narrator 1
• Video Narrator 2
• Video Narrator 3
• Video Narrator 4
• Gates Schwarzmann, Analyst at TD Cowen
• Gustavo Farias, Analyst at UBS
• Steven Wahrhaftig, Analyst at Wedbush
• Luke Morison, Analyst at Canaccord
• Maria Clara Infantozzi, Analyst at Itaú BBA
• Puneet Jain, Analyst at JPMorgan