Financial Performance Highlights - CI&T achieved a Net Revenue Growth of 9% in 2Q23 compared to 2Q22, both on a reported and constant currency basis[18] - The Adjusted EBITDA Margin was 20% in 2Q23, compared to 191% in 2Q22[51] - Adjusted Net Profit Margin increased to 11% in 2Q23, up from 10% in 2Q22[36] - For 6M23, Net Revenue reached R$1,1818 million[57] - Adjusted EBITDA for 6M23 was R$2307 million, resulting in a 195% margin[77, 90] - Adjusted Net Profit for 6M23 was R$1303 million[79] Client and Revenue Metrics - The Average Net Revenue Retention Rate over the last 5 years is 123%[8] - The Net Revenue Retention Rate in 2022 was 126%[76] - North America accounts for 46% of the total Net Revenue[73] - LATAM accounts for 40% of the total Net Revenue[73] - The Technology and Telecommunications industry contributes 19% to the Net Revenue[73]

[2Q23 Earnings Release](index=3&type=section&id=2Q23%20Earnings%20Release) [Operating and Financial Highlights](index=3&type=section&id=Operating%20and%20Financial%20Highlights) CI&T achieved strong Q2 and H1 2023 growth, with net revenue and profit significantly increasing, alongside improved client metrics and cash flow Q2 2023 Financial Highlights (vs. Q2 2022) | Metric | Q2 2023 | Q2 2022 | Change | | :--- | :--- | :--- | :--- | | Net Revenue (BRL) | 571.8M | 525.0M | +8.9% | | Net Profit (BRL) | 47.8M | 26.0M | +84.0% | | Adjusted EBITDA (BRL) | 114.2M | 100.4M | +13.8% | | Adjusted Net Profit (BRL) | 63.1M | 52.3M | +20.8% | | Adjusted EBITDA Margin (%) | 20.0% | 19.1% | +0.9 p.p. | | Clients > BRL 1M Revenue (LTM) | 183 | 127 | +44.1% | 6M 2023 Financial Highlights (vs. 6M 2022) | Metric | 6M 2023 | 6M 2022 | Change | | :--- | :--- | :--- | :--- | | Net Revenue (BRL) | 1,181.8M | 1,016.9M | +16.2% | | Net Profit (BRL) | 100.2M | 55.2M | +81.5% | | Adjusted EBITDA (BRL) | 230.7M | 184.9M | +24.8% | | Adjusted Net Profit (BRL) | 130.3M | 91.8M | +42.0% | | Operating Cash Flow (BRL) | 117.6M | (87.1M) | N/A | [Business Overview and Management Commentary](index=3&type=section&id=Business%20Overview%20and%20Management%20Commentary) Management emphasizes pioneering enterprise AI for digital transformation, supported by diversified revenue across geographies and key industry verticals - The company's strategic vision is to pioneer the enterprise adoption of Artificial Intelligence, aiming to enhance productivity, quality, and progress in a reliable and secure framework[7](index=7&type=chunk)[8](index=8&type=chunk)[31](index=31&type=chunk) Q2 2023 Revenue Breakdown | Breakdown | Percentage (%) | | :--- | :--- | | **By Geography** | | | North America | 45% | | Latam | 40% | | Europe | 10% | | Asia Pacific | 5% | | **By Industry** | | | Financial Services & Consumer Goods | Most relevant | | Technology & Telecommunications | Grew in relevance | [Financial Performance Analysis](index=3&type=section&id=Financial%20Performance%20Analysis) Q2 2023 profitability improved, with higher Adjusted EBITDA and Net Profit margins driven by SG&A efficiency and reduced income tax expense - Adjusted EBITDA margin increased by **0.9 percentage points** to **20.0%** in Q2 2023, primarily due to lower SG&A expenses as a percentage of revenue[9](index=9&type=chunk) - Adjusted Net Profit margin grew by **1.0 percentage point** to **11.0%** in Q2 2023, mainly due to SG&A dilution and lower income tax expenses[11](index=11&type=chunk) - Income tax expense in Q2 2023 decreased by **37.3%** compared to Q2 2022, largely because of the amortization of goodwill for tax purposes[127](index=127&type=chunk) [Business Outlook](index=4&type=section&id=Business%20Outlook) The company updated its 2023 full-year guidance, projecting net revenue growth and an Adjusted EBITDA margin of at least 19%, with Q3 revenue forecasts 2023 Full-Year Guidance | Metric | Guidance | | :--- | :--- | | Net Revenue Growth (Constant Currency) | 4.0% to 8.0% YoY | | Adjusted EBITDA Margin | At least 19% | - For Q3 2023, net revenue is expected to be at least **BRL 545 million** at constant currency, which translates to **BRL 525 million** on a reported basis, a **2% decline** compared to Q3 2022[120](index=120&type=chunk) [Share Repurchase Program](index=4&type=section&id=Share%20Repurchase%20Program) The Board authorized a share repurchase program for up to 1.5 million shares, with 640,148 shares repurchased by June 30, 2023 - A share repurchase program for up to **1.5 million** class A common shares was approved on May 17, 2023, and management expects to continue its execution[100](index=100&type=chunk) - As of June 30, 2023, the company held **640,148 shares** of its own shares, acquired for **BRL 18,476 thousand**, under the repurchase program[171](index=171&type=chunk) [Non-IFRS Financial Measures and Reconciliations](index=4&type=section&id=Non-IFRS%20Financial%20Measures%20and%20Reconciliations) Non-IFRS measures like Adjusted EBITDA and Net Profit are used to assess operational performance by excluding specific non-recurring items - Non-IFRS measures like Adjusted Gross Profit, Adjusted EBITDA, and Adjusted Net Profit are used to provide a better understanding of operational performance by excluding items like acquisition expenses, stock-based compensation, and certain depreciation/amortization[37](index=37&type=chunk)[39](index=39&type=chunk)[101](index=101&type=chunk) Reconciliation of Net Profit to Adjusted EBITDA (in BRL thousand) | Description | Q2 2023 (BRL thousand) | Q2 2022 (BRL thousand) | 6M 2023 (BRL thousand) | 6M 2022 (BRL thousand) | | :--- | :--- | :--- | :--- | :--- | | **Net profit for the period** | **47,839** | **25,999** | **100,222** | **55,222** | | Net financial cost | 18,482 | 17,533 | 38,451 | 34,245 | | Income tax expense | 11,298 | 18,016 | 23,021 | 33,330 | | Depreciation and amortization | 23,056 | 24,205 | 48,109 | 43,596 | | Stock-based compensation | 9,719 | (106) | 15,112 | 1,133 | | Acquisition-related expenses | 3,965 | 14,859 | 6,089 | 17,554 | | **Adjusted EBITDA** | **114,222** | **100,391** | **230,727** | **184,906** | Reconciliation of Net Profit to Adjusted Net Profit (in BRL thousand) | Description | Q2 2023 (BRL thousand) | Q2 2022 (BRL thousand) | 6M 2023 (BRL thousand) | 6M 2022 (BRL thousand) | | :--- | :--- | :--- | :--- | :--- | | **Net profit for the period** | **47,839** | **25,999** | **100,222** | **55,222** | | Acquisition-related expenses | 15,274 | 26,255 | 30,110 | 36,578 | | **Adjusted Net Profit** | **63,113** | **52,254** | **130,332** | **91,800** | [Unaudited Condensed Consolidated Interim Financial Information](index=11&type=section&id=Unaudited%20condensed%20consolidated%20interim%20financial%20information) [Consolidated Financial Statements](index=13&type=section&id=Consolidated%20Financial%20Statements) Unaudited 6M 2023 financial statements show stable assets, increased net profit, and a significant positive shift in operating cash flow [Statement of Financial Position](index=13&type=section&id=Statement%20of%20Financial%20Position) Total assets slightly decreased to BRL 2.82 billion, while equity increased to BRL 1.40 billion and liabilities decreased Key Balance Sheet Items (in BRL thousand) | Account | June 30, 2023 (BRL thousand) | Dec 31, 2022 (BRL thousand) | | :--- | :--- | :--- | | **Total Assets** | **2,817,991** | **3,026,763** | | Cash and cash equivalents | 149,232 | 185,727 | | Intangible assets and goodwill | 1,673,996 | 1,750,898 | | **Total Liabilities** | **1,421,207** | **1,688,584** | | Loans and borrowings | 863,354 | 974,231 | | **Total Equity** | **1,396,784** | **1,338,179** | [Statement of Profit or Loss](index=14&type=section&id=Statement%20of%20Profit%20or%20Loss) 6M 2023 net profit reached BRL 100.2 million on BRL 1.18 billion revenue, driven by growth and expense control Income Statement Summary (in BRL thousand) | Metric | 6M 2023 (BRL thousand) | 6M 2022 (BRL thousand) | | :--- | :--- | :--- | | Net Revenue | 1,181,824 | 1,016,887 | | Gross Profit | 399,767 | 346,393 | | Operating Profit | 161,694 | 122,797 | | **Net Profit for the period** | **100,222** | **55,222** | | Basic EPS (in BRL) | 0.75 | 0.42 | [Statement of Cash Flows](index=17&type=section&id=Statement%20of%20Cash%20Flows) 6M 2023 operating cash flow significantly improved to BRL 62.1 million, driven by profit and working capital management Cash Flow Summary (in BRL thousand) | Cash Flow Activity | 6M 2023 (BRL thousand) | 6M 2022 (BRL thousand) | | :--- | :--- | :--- | | Net cash from (used in) operating activities | 62,108 | (149,736) | | Net cash from investment activities | 48,731 | 225,143 | | Net cash used in financing activities | (144,427) | (115,042) | | **Net decrease in cash and cash equivalents** | **(33,588)** | **(39,635)** | [Notes to the Financial Statements](index=19&type=section&id=Notes%20to%20the%20Financial%20Statements) Notes detail revenue by service, industry, and geography, alongside financial risk management strategies and loan covenant compliance [Net Revenue (Note 19)](index=33&type=section&id=Net%20Revenue%20(Note%2019)) Software development drives 95% of 6M 2023 revenue, with financial services and North America as leading segments Net Revenue by Type - 6M 2023 (in BRL thousand) | Service Type | Revenue (BRL thousand) | % of Total | | :--- | :--- | :--- | | Software development | 1,124,217 | 95.1% | | Software maintenance | 32,815 | 2.8% | | Consulting | 20,736 | 1.8% | | Other | 4,056 | 0.3% | | **Total** | **1,181,824** | **100%** | Net Revenue by Industry Vertical - 6M 2023 (in BRL thousand) | Industry | Revenue (BRL thousand) | % of Total | | :--- | :--- | :--- | | Financial services | 333,814 | 28.2% | | Consumer goods | 238,149 | 20.2% | | Technology and telecommunications | 229,187 | 19.4% | | Retail and industrial goods | 143,913 | 12.2% | | Life sciences | 127,668 | 10.8% | | Others | 109,093 | 9.2% | | **Total** | **1,181,824** | **100%** | - The top client represented **11%** of total net revenues as of June 30, 2023, a decrease from **16%** in the same period of 2022, indicating reduced client concentration[173](index=173&type=chunk) [Intangible Assets and Goodwill (Note 10)](index=24&type=section&id=Intangible%20Assets%20and%20Goodwill%20(Note%2010)) Intangible assets and goodwill totaled BRL 1.67 billion, with no impairment indicators identified for the period Intangible Assets and Goodwill (in BRL thousand) | Asset | June 30, 2023 (BRL thousand) | Dec 31, 2022 (BRL thousand) | | :--- | :--- | :--- | | Customer relationship | 257,875 | 288,943 | | Goodwill | 1,387,979 | 1,432,894 | | Other Intangibles | 28,143 | 29,062 | | **Total** | **1,673,996** | **1,750,898** | - Management concluded that no impairment indicator for intangible assets and goodwill was identified for the six-month period ended June 30, 2023[145](index=145&type=chunk) [Financial Instruments and Risk Management (Note 24)](index=38&type=section&id=Financial%20Instruments%20and%20Risk%20Management%20(Note%2024)) The company manages market, credit, and liquidity risks through hedging strategies, counterparty analysis, and cash flow projections - The Group uses non-derivative financial instruments (USD-denominated debt) as a cash flow hedge against the foreign exchange risk of its highly probable future export revenues in U.S. dollars[218](index=218&type=chunk) - The Group is transitioning from LIBOR to alternative rates like SOFR for its financial instruments and has implemented appropriate fallback clauses[188](index=188&type=chunk)[214](index=214&type=chunk) - Credit risk is managed by holding cash and financial investments with bank counterparties rated from **BB- to A+** by Standard & Poor's[231](index=231&type=chunk)

CI&T Inc (NYSE:CINT) Q1 2023 Earnings Conference Call May 19, 2023 8:00 AM ET Company Participants Eduardo Galvao - Investor Relations Director Cesar Gon - Founder and Chief Executive Officer Bruno Guicardi - Founder and President for North America and Europe Stanley Rodrigues - Chief Financial Officer Conference Call Participants Tyler DuPont - Bank of America Ashwin Shirvaikar - Citi Eduardo Galvao Good morning, and welcome to CI&T Earnings Call for the First Quarter of 2023. I am Eduardo Galvao, Investor ...

Cesar Gon Founder & CEO Eduardo Galvão IR Director investors.ciandt.com Forward-looking statements represent our management's beliefs and assumptions only as of the date of this press release. You should read this press release with the understanding that our actual future results may be materially different from what we expect. These statements are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to diff ...

[1Q23 Earnings Release](index=3&type=section&id=1Q23_Earnings_Release) [Operating and Financial Highlights](index=3&type=section&id=Operating_and_Financial_Highlights) CI&T reported strong Q1 2023 results, with significant year-over-year growth in net revenue, net profit, and adjusted EBITDA 1Q23 Key Financial and Operating Metrics (BRL million, vs. 1Q22) | Metric | 1Q23 | 1Q22 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | BRL 610.0 million | BRL 491.9 million | +24.0% | | Net Profit | BRL 52.4 million | BRL 29.2 million | +79.2% | | Adjusted EBITDA | BRL 116.5 million | BRL 84.5 million | +37.9% | | Adjusted EBITDA Margin | 19.1% | 17.2% | +1.9 p.p. | | Adjusted Net Profit | BRL 67.2 million | BRL 39.5 million | +70.0% | | Cash from Operations | BRL 116.5 million | -BRL 47.0 million | N/A | | Clients > BRL 1M Revenue (LTM) | 180 | 110 | +63.6% | [Comments on Financial Performance](index=3&type=section&id=Comments_on_Financial_Performance) Q1 2023 revenue growth was driven by regional expansion, maintaining gross profit margin and improving SG&A efficiency - Net revenue grew **24.0%** YoY (**24.3%** at constant currency), with growth observed in all operating regions[270](index=270&type=chunk) - Adjusted Gross Profit Margin was **35.1%**, in line with the **35.2%** margin in 1Q22[13](index=13&type=chunk)[26](index=26&type=chunk) - SG&A and other operating expenses as a percentage of revenue decreased to **19.1%** in 1Q23 from **20.4%** in 1Q22, indicating improved operational efficiency[280](index=280&type=chunk) - Net financial expenses rose **19.5%** YoY to **BRL 20.0 million**, primarily due to higher debt, increased interest rates, and a negative foreign exchange variation[271](index=271&type=chunk) - Adjusted Net Profit margin expanded by **3 percentage points** to **11.0%**, benefiting from SG&A dilution and lower income tax[14](index=14&type=chunk) [Business Outlook](index=4&type=section&id=Business_Outlook) CI&T forecasts Q2 2023 net revenue of at least BRL 570 million, maintaining full-year revenue growth and EBITDA margin guidance 2023 Business Outlook | Period | Metric | Guidance | | :--- | :--- | :--- | | **Q2 2023** | Net Revenue | At least BRL 570 million | | **Full Year 2023** | Net Revenue Growth (Constant Currency) | 13% to 17% YoY | | **Full Year 2023** | Adjusted EBITDA Margin | At least 19% | [Non-IFRS Financial Measures and Reconciliations](index=4&type=section&id=Non-IFRS_Financial_Measures_and_Reconciliations) The company uses non-IFRS measures like Adjusted Gross Profit, EBITDA, and Net Profit to clarify operational performance - CI&T uses non-IFRS measures like Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Profit, and Net Revenue at Constant Currency to enhance investor understanding of its financial performance, excluding items not directly related to service management[48](index=48&type=chunk) Reconciliation of Gross Profit to Adjusted Gross Profit (in BRL thousand) | Description | 1Q23 | 1Q22 | | :--- | :--- | :--- | | **Gross Profit (IFRS)** | **202,130** | **162,880** | | Depreciation and amortization | 9,410 | 9,318 | | Stock-based compensation | 2,376 | 1,182 | | **Adjusted Gross Profit** | **213,916** | **173,380** | | *Adjusted Gross Profit Margin* | *35.1%* | *35.2%* | Reconciliation of Net Profit to Adjusted EBITDA (in BRL thousand) | Description | 1Q23 | 1Q22 | | :--- | :--- | :--- | | **Net profit for the period (IFRS)** | **52,382** | **29,223** | | Net financial cost | 19,968 | 16,712 | | Income tax expense | 11,723 | 15,314 | | Depreciation and amortization | 25,053 | 19,390 | | Stock-based compensation | 5,393 | 1,239 | | Government grants | (140) | (58) | | Acquisition-related expenses | 2,124 | 2,695 | | **Adjusted EBITDA** | **116,504** | **84,515** | | *Adjusted EBITDA Margin* | *19.1%* | *17.2%* | Reconciliation of Net Profit to Adjusted Net Profit (in BRL thousand) | Description | 1Q23 | 1Q22 | | :--- | :--- | :--- | | **Net profit for the period (IFRS)** | **52,382** | **29,223** | | Acquisition-related expenses | 14,836 | 10,323 | | **Adjusted Net Profit** | **67,218** | **39,546** | | *Adjusted Net Profit Margin* | *11.0%* | *8.0%* | [Unaudited Condensed Consolidated Interim Financial Statements](index=6&type=section&id=Unaudited_Condensed_Consolidated_Interim_Financial_Statements) [Statement of Financial Position](index=7&type=section&id=Statement_of_Financial_Position) CI&T's total assets were BRL 3.018 billion as of March 31, 2023, with liabilities at BRL 1.631 billion and equity at BRL 1.387 billion Condensed Statement of Financial Position (in BRL thousands) | Account | March 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **3,018,407** | **3,026,763** | | Cash and cash equivalents | 251,550 | 185,727 | | Intangible assets and goodwill | 1,719,226 | 1,750,898 | | **Total Liabilities** | **1,631,338** | **1,688,584** | | Loans and borrowings | 948,324 | 974,231 | | Accounts payable for business combination | 204,686 | 204,949 | | **Total Equity** | **1,387,069** | **1,338,179** | [Statement of Profit or Loss](index=6&type=section&id=Statement_of_Profit_or_Loss) CI&T reported Q1 2023 net revenue of BRL 610.0 million (up 24.0%) and net profit of BRL 52.4 million (up 79.2%) Condensed Statement of Profit or Loss (in BRL thousands) | Account | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Net Revenue | 609,991 | 491,872 | | Gross Profit | 202,130 | 162,880 | | Operating profit | 84,073 | 61,249 | | Profit before Income tax | 64,105 | 44,537 | | **Net profit for the period** | **52,382** | **29,223** | | **Earnings per share – basic (in BRL)** | **0.39** | **0.22** | [Statement of Cash Flows](index=8&type=section&id=Statement_of_Cash_Flows) In Q1 2023, CI&T generated BRL 93.1 million net cash from operating activities, a strong turnaround from prior year Condensed Statement of Cash Flows (in BRL thousands) | Activity | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Net cash from (used in) operating activities | 93,072 | (72,719) | | Net cash from (used in) investment activities | (2,773) | 92,830 | | Net cash used in financing activities | (23,269) | (39,843) | | **Net increase/(decrease) in cash** | **67,030** | **(19,732)** | | **Cash and cash equivalents at end of period** | **251,550** | **131,827** | [Notes to the Financial Statements](index=19&type=section&id=Notes_to_the_Financial_Statements) The notes detail accounting policies, business combinations, intangible assets, revenue, expenses, and risk management [Note 1 & 2: Reporting Entity and Business Combination](index=19&type=section&id=Note_1_and_2_Reporting_Entity_and_Business_Combination) CI&T Inc. is a holding company developing software solutions, completing several acquisitions in 2022 including Somo and Ntersol - The company is a holding entity for subsidiaries that develop customizable software solutions, including AI, analytics, and cloud technologies[302](index=302&type=chunk) - In **2022**, the company acquired Somo, Box **1824**, Transpire, and Ntersol. The total consideration transferred for these acquisitions was **BRL 447.4 million**, **BRL 34.2 million**, **BRL 77.3 million**, and **BRL 664.7 million**, respectively[35](index=35&type=chunk)[303](index=303&type=chunk) [Note 11: Intangible Assets and Goodwill](index=26&type=section&id=Note_11_Intangible_Assets_and_Goodwill) Intangible assets and goodwill totaled BRL 1.719 billion as of March 31, 2023, mainly comprising goodwill and customer relationships Intangible Assets and Goodwill Breakdown (in BRL thousands) | Asset | March 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Customer relationship | 274,890 | 288,943 | | Brands | 5,849 | 7,464 | | Software & Other | 21,488 | 21,567 | | **Goodwill** | **1,416,999** | **1,432,894** | | **Total** | **1,719,226** | **1,750,898** | Goodwill by Acquisition (in BRL thousands) | Acquisition | March 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Dextra | 595,721 | 595,721 | | Ntersol | 456,887 | 469,235 | | Somo | 260,715 | 260,466 | | Transpire | 61,187 | 63,702 | | Other | 42,489 | 47,470 | | **Total Goodwill** | **1,416,999** | **1,432,894** | [Note 13: Loans and Borrowings](index=29&type=section&id=Note_13_Loans_and_Borrowings) Total loans and borrowings were BRL 948.3 million as of March 31, 2023, with compliance to financial covenants maintained - Total loans and borrowings were **BRL 948.3 million**, with **BRL 233.6 million** classified as current and **BRL 714.7 million** as non-current[116](index=116&type=chunk)[355](index=355&type=chunk) - The debt contracts include covenants, such as maintaining a specific Net Debt to EBITDA ratio, which could trigger early maturity if breached[140](index=140&type=chunk)[264](index=264&type=chunk) - The company was in compliance with all loan covenants as of March **31**, **2023**[357](index=357&type=chunk) [Note 18: Stock-based Compensation](index=33&type=section&id=Note_18_Stock-based_Compensation) The Group maintains equity and cash-settled stock-based compensation plans, with Q1 2023 expenses at BRL 5.4 million - The company has multiple stock-based payment arrangements, including Stock Option Plans (SOP), Incentive Stock Options (ISO), and Restricted Stock Units (RSU) for its employees[147](index=147&type=chunk)[124](index=124&type=chunk) - Total stock-based compensation expense recognized in profit or loss for Q1 **2023** was **BRL 5.39 million**, compared to **BRL 1.24 million** in Q1 **2022**[130](index=130&type=chunk) - As of March **31**, **2023**, there were **4,131,273** outstanding stock options and **1,437,030** outstanding RSUs[130](index=130&type=chunk) [Note 20: Net Revenue](index=37&type=section&id=Note_20_Net_Revenue) Q1 2023 net revenue was BRL 610.0 million, mainly from software development, with Technology and Telecommunications leading growth Net Revenue by Type (in BRL thousands) | Revenue Type | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Software development | 580,876 | 470,662 | | Software maintenance | 17,020 | 13,380 | | Consulting | 10,599 | 5,173 | | Other | 1,506 | 2,657 | | **Total net revenue** | **609,991** | **491,872** | Net Revenue by Industry Vertical (in BRL thousands) | Industry Vertical | March 31, 2023 | March 31, 2022 | Change YoY | | :--- | :--- | :--- | :--- | | Financial services | 174,783 | 156,326 | +11.8% | | Technology and telecommunications | 125,060 | 68,056 | +83.8% | | Consumer goods | 116,156 | 104,369 | +11.3% | | Retail and industrial goods | 75,814 | 73,222 | +3.5% | | Life sciences | 63,281 | 62,893 | +0.6% | | Others | 54,897 | 27,006 | +103.3% | | **Total net revenue** | **609,991** | **491,872** | **+24.0%** | - Revenue from a single customer represented **11.1%** of total net revenues as of March **31**, **2023**, down from **15.4%** in the prior year period[254](index=254&type=chunk) [Note 21: Expenses by Nature](index=39&type=section&id=Note_21_Expenses_by_Nature) Total costs and expenses for Q1 2023 were BRL 525.9 million, with employee expenses as the largest component Expenses by Nature (in BRL thousands) | Expense Category | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Employee expenses | (443,313) | (365,596) | | Third-party services and other inputs | (34,070) | (24,226) | | Depreciation and amortization | (25,053) | (19,390) | | Stock-based compensation | (5,393) | (1,239) | | Other costs and expenses | (17,789) | (18,072) | | **Total** | **(525,918)** | **(430,623)** | [Note 24: Earnings Per Share](index=41&type=section&id=Note_24_Earnings_Per_Share) For Q1 2023, basic EPS was BRL 0.39 and diluted EPS was BRL 0.38, based on net profit of BRL 52.4 million Earnings Per Share Calculation | Metric | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Net Profit (in BRL thousands) | 52,382 | 29,223 | | Weighted average basic shares | 133,834,456 | 132,639,430 | | **Basic EPS (in BRL)** | **0.39** | **0.22** | | Weighted average diluted shares | 137,279,821 | 132,963,392 | | **Diluted EPS (in BRL)** | **0.38** | **0.22** | [Note 25: Financial Instruments and Risk Management](index=42&type=section&id=Note_25_Financial_Instruments_and_Risk_Management) The Group manages market, credit, and liquidity risks, utilizing hedges and swaps for foreign currency and interest rate exposures - The Group is exposed to foreign exchange risk as revenue is mainly denominated in foreign currency while expenses are mainly in Brazilian Reais (BRL)[194](index=194&type=chunk)[215](index=215&type=chunk) - To mitigate currency risk, the company uses cash flow hedge accounting, designating non-derivative financial instruments (long-term debt in USD) to hedge highly probable future export revenues[179](index=179&type=chunk)[215](index=215&type=chunk) - The company is exposed to interest rate risk from changes in CDI, LIBOR, and SOFR on its financial assets and liabilities. It uses interest rate swaps to hedge this exposure[201](index=201&type=chunk)[221](index=221&type=chunk)[229](index=229&type=chunk) - Credit risk is managed by analyzing the financial condition of counterparties and setting credit limits. The maximum credit risk exposure from financial assets was **BRL 1.068 billion** as of March **31**, **2023**[241](index=241&type=chunk)[243](index=243&type=chunk) - Liquidity risk is managed through cash flow projections and maintaining credit lines to ensure funds are available to meet obligations[208](index=208&type=chunk)[245](index=245&type=chunk) [Share Repurchase Program](index=55&type=section&id=Share_Repurchase_Program) CI&T's Board approved a share repurchase program for up to 1.5 million Class A common shares over a 12-month term - The Board of Directors approved a share repurchase program for up to **1.5 million** Class A common shares[238](index=238&type=chunk)[258](index=258&type=chunk) - The program has a term of **12 months** and was established to meet obligations from stock-based compensation plans and M&A deals[273](index=273&type=chunk)[260](index=260&type=chunk) - Repurchases may occur through open market purchases, privately negotiated transactions, or other means, and the program can be suspended or discontinued at any time[262](index=262&type=chunk)

Table of Contents ITEM 16. RESERVED 113 A. Audit Committee Financial Expert 113 113 113 114 114 114 114 114 114 115 115 115 115 | --- | |---------------------------------------------------------------------------| | | | B. Code of Ethics | | C. Principal Accountant Fees and Services | | D. Exemptions from the listing standards for audit committees | | E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers | | F. Change in registrant's certifying accountant | | G. Corporate governance | | ...

Financial Data and Key Metrics Changes - The net revenue for 2022 reached BRL2.19 billion, a 51% year-over-year increase, or 58% growth at constant currency [23][31] - Adjusted EBITDA for the fourth quarter was BRL127.4 million, a 25% increase compared to Q4 2021, with an adjusted EBITDA margin of 20.8% [12][30] - Adjusted net profit for Q4 2022 was BRL54.5 million, a 4.3% increase from Q4 2021, with a net profit margin of 8.9% [12][34] Business Line Data and Key Metrics Changes - The adjusted EBITDA margin for the full year was 19.1%, reflecting the impact of acquired companies [5][33] - The number of clients generating more than BRL20 million annually doubled from 2020 to 2022, indicating strong growth in high-value accounts [32] Market Data and Key Metrics Changes - The U.S. and Europe are the fastest-growing regions, with over 55% of revenue coming from mature economies, expected to trend towards 60% by the end of 2023 [6][14] - The share of revenue from the top 10 clients decreased from 67% in 2020 to under 50% in 2022, with a target of 40% by the end of 2023 [6][14] Company Strategy and Development Direction - The company emphasizes digital efficiency and aims to help clients capture digital opportunities effectively, positioning itself as a leader in digital innovation [4][17] - CI&T's strategy includes a disciplined approach to adding new clients and focusing on sustainable growth through M&A and organic expansion [6][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about technology advancements and the necessity for companies to invest in digital initiatives, despite a conservative approach to new projects due to economic uncertainty [17][60] - The company expects net revenue for Q1 2023 to be at least BRL590 million, representing a 20% year-over-year growth, with a full-year growth projection of 13% to 17% [36][60] Other Important Information - The company has been actively working on its ESG initiatives, including a commitment to sustainability and diversity in hiring practices [10][28] - CI&T's attrition rate improved to 14% in 2022 from 16% in 2021, with leadership attrition remaining below 5% [27][54] Q&A Session Summary Question: Are you seeing any signs of demand stabilization improvement? - Management noted that while there is uncertainty in the budget process, clients are maintaining current digital investments but are more conservative with new initiatives [60][70] Question: Can you comment on the FX losses during the fourth quarter? - The CFO explained that FX variations impacted accounts receivable in the Brazilian operation, which is recorded through the P&L [52] Question: What are the hiring trends expected over the near term? - Management indicated that hiring is typically slower in Q1 but is expected to pick up in subsequent quarters, with a more favorable hiring environment due to economic conditions [51] Question: How is the company preparing for the disruption of generative AI? - The company is experimenting with generative AI tools to enhance productivity across various functions, indicating a proactive approach to leveraging new technologies [55][73] Question: What is the outlook for M&A in 2023? - Management stated that while there will be less M&A activity in 2023, the focus will be on integrating recent acquisitions and preparing for future opportunities [74][75]

During 2022, CI&T added 84 new clients with annual revenue above R$1.0 million to our portfolio, demonstrating CI&T's capability to onboard new clients and the resilience in the demand for digital services. Business Outlook Table of Contents In 4Q22, net financial expenses were R$31.9 million, an increase of R$23.8 million, compared to 4Q21, mainly as a result of a net foreign exchange loss of R$15.8 million in 4Q22, compared to a net foreign exchange gain of R$9.2 million in 4Q21. In 2022, the net profit w ...

| --- | --- | --- | --- | --- | --- | |-------|------------------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | GLOBAL DIGITAL SPECIALISTS | | | | | | | 27 YEARS MAKE THEIR TOMORROW | | | | | SAFE HARBOR AND NON-IFRS MEASURES FORWARD-LOOKING STATEMENTS This presentation includes "forward-looking statements" within the meaning of the "safe harbor"provisions of the United States Private Securities Litigation R ...

Financial Data and Key Metrics Changes - The company's net revenue for Q3 2022 was BRL 559 million, representing a 49% year-over-year growth, with 35 percentage points from organic growth and 14 percentage points from acquisitions [14][23] - Adjusted EBITDA margin for the quarter was 19.2%, showing a sequential improvement from 19.1% in Q2 2022 and 17.5% in Q1 2022 [28] - Adjusted net profit reached BRL 69.5 million, a 157% increase compared to Q3 2021, with an adjusted net profit margin of 12.4% [29] Business Line Data and Key Metrics Changes - The company added 71 new clients in the last 12 months, increasing the total number of clients with annual revenue above BRL 1 million to 147 [14] - Revenue from financial services grew by 38%, food and beverage by 27%, TMT by 99%, and farming and cosmetics by 50% year-over-year [27] Market Data and Key Metrics Changes - North America remains the fastest-growing market, with expectations for further growth following the acquisition of NTERSOL [26] - The company recorded revenue growth across all regions and industry verticals year-over-year [26] Company Strategy and Development Direction - The company completed its first wave of acquisitions, including NTERSOL, which enhances its capabilities in the financial services sector and nearly doubles its onshore team in the U.S. [8][10] - The focus remains on organic growth, leveraging recent acquisitions to expand presence in new geographies and verticals [13][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver solid growth in 2023, despite macroeconomic challenges, citing a strong pipeline and long-term client visibility [39][65] - The company anticipates net revenue growth of at least 58% year-over-year on a constant currency basis for the full year of 2022 [31] Other Important Information - The company was recognized as a Great Place to Work in Brazil and all countries of operation, highlighting its talent retention and engagement strategies [19][20] - The adjusted EBITDA margin was impacted by lower margins from recently acquired companies and increased G&A expenses due to the IPO [28] Q&A Session Summary Question: Changes in client priorities and project delays - Management noted a strong client pipeline but acknowledged trends towards shorter investment cycles and a focus on efficiency due to the macro environment [34][35] Question: Expectations for 2023 growth - Management is still finalizing the 2023 budget but anticipates solid growth based on a strong 2022 performance and new client additions [37][39] Question: Specific geographies or verticals showing strength or weakness - Management reported consistent growth across all verticals and geographies, with notable trends in financial services and retail [42][44] Question: Supply-side dynamics and wage inflation - Attrition rates have decreased to 15%, and while the market remains competitive, wage inflation pressures have subsided [46] Question: Pipeline of projects and client project postponements - Existing clients are taking a more meticulous approach to project initiation, focusing on initiatives with quicker returns [48][49] Question: Future M&A activity - Management indicated that the focus will shift to leveraging recent acquisitions for organic growth rather than pursuing new M&A in the immediate future [51][53] Question: Integration capacity for multiple M&A - The company has a structured approach to integrating acquisitions as independent growth units, allowing for parallel integration processes [55][59] Question: Financial contribution of recent acquisitions - Acquired companies are expected to initially operate at lower EBITDA margins, with plans to enhance their profitability over the next 1 to 3 years [62]