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]

[Third Quarter 2022 Earnings Release](index=3&type=section&id=CI%26T%20Reports%20Solid%20Third%20Quarter%202022%20Financial%20and%20Operational%20Results) CI&T reported strong third-quarter 2022 financial results, driven by significant revenue growth, improved profitability, and strategic acquisitions [Financial and Operational Highlights](index=3&type=section&id=Third%20Quarter%20%283Q22%29%20Operating%20and%20Financial%20Highlights) CI&T achieved strong 3Q22 growth with net revenue up 48.7% to BRL 559.0 million, a significant turnaround to BRL 40.6 million net profit, and a near doubling of high-value clients 3Q22 Key Financial Highlights (vs. 3Q21) | Metric | 3Q22 | Change (YoY) | | :--- | :--- | :--- | | Net Revenue | BRL 559.0 million | +48.7% | | Net Profit | BRL 40.6 million | From BRL 2.2 million Loss | | Adjusted EBITDA | BRL 107.3 million | +34.1% | | Adjusted Net Profit | BRL 69.5 million | +156.7% | | Clients > BRL 1 million Revenue | 147 | +93.4% (from 76) | | Employees (CI&Ters) | 6,887 | +27.6% | 9M22 Key Financial Highlights (vs. 9M21) | Metric | 9M22 | Change (YoY) | | :--- | :--- | :--- | | Net Revenue | BRL 1,575.9 million | +59.6% | | Net Profit | BRL 95.8 million | +16.7% | | Adjusted EBITDA | BRL 293.8 million | +32.2% | | Adjusted Net Profit | BRL 162.9 million | +45.6% | [Operational and Financial Performance Review](index=3&type=section&id=Comments%20on%20the%203Q22%20financial%20performance) 3Q22 revenue growth was driven by organic expansion and acquisitions, though adjusted gross and EBITDA margins slightly contracted due to acquisition-related costs, showing sequential improvement - Net revenue in 3Q22 was **BRL 559.0 million**, a **48.7%** increase YoY (**51.3%** at constant currency), with acquisitions contributing **14 percentage points** to this growth[12](index=12&type=chunk) - The company added **20 new clients** with annual revenue above **BRL 1.0 million**, increasing the total from **127** in 2Q22 to **147** in 3Q22[13](index=13&type=chunk) - Adjusted gross profit margin slightly decreased to **36.9%** from **37.1%** in 3Q21, mainly due to lower margins from newly acquired companies[14](index=14&type=chunk) - Adjusted EBITDA margin decreased to **19.2%** from **21.3%** in 3Q21, impacted by increased SG&A expenses, but showed sequential improvement from **17.5%** in 1Q22 and **19.1%** in 2Q22[16](index=16&type=chunk) - Net profit for 3Q22 was **BRL 40.6 million**, a significant improvement from a net loss of **BRL 2.2 million** in 3Q21, with Adjusted net profit growing **156.7%** to **BRL 69.5 million**[19](index=19&type=chunk) [Business Outlook](index=5&type=section&id=Business%20Outlook) CI&T raised its full-year 2022 guidance, projecting at least BRL 605 million in Q4 net revenue and at least 58% constant currency growth for the full year Financial Guidance | Period | Metric | Guidance | | :--- | :--- | :--- | | **Q4 2022** | Net Revenue | At least BRL 605 million | | | Net Revenue Growth (Constant Currency) | 41% YoY | | **Full Year 2022** | Net Revenue Growth (Constant Currency) | At least 58% YoY | | | Net Revenue Growth (Reported) | At least 51% YoY | | | Adjusted EBITDA Margin | At least 19% | [Non-IFRS Measures and Reconciliation](index=6&type=section&id=Reconciliation%20of%20Non-IFRS%20financial%20measures%20to%20comparable%20IFRS%20financial%20measures) The company uses non-IFRS measures like Adjusted EBITDA and Adjusted Net Profit to clarify operational performance by excluding non-recurring items, with 3Q22 Adjusted EBITDA at BRL 107.3 million - The company uses non-IFRS measures like Adjusted Gross Profit, Adjusted EBITDA, and Adjusted Net Profit to enhance understanding of its financial performance by excluding items not related to direct management of services[28](index=28&type=chunk) Reconciliation of Net Profit to Adjusted EBITDA (3Q22, in BRL thousands) | Description | Amount | | :--- | :--- | | **Net profit for the period** | **40,608** | | Net financial cost | 7,432 | | Income tax expense | 16,537 | | Depreciation and amortization | 23,558 | | Stock-based compensation | 761 | | Write-off and Impairment | 2,156 | | Acquisition-related expenses | 16,497 | | Other adjustments | (204) | | **Adjusted EBITDA** | **107,343** | Reconciliation of Net Profit to Adjusted Net Profit (3Q22, in BRL thousands) | Description | Amount | | :--- | :--- | | **Net profit for the period** | **40,608** | | Write-off and Impairment | 2,156 | | Acquisition-related expenses | 26,743 | | **Adjusted Net Profit** | **69,507** | [Unaudited Condensed Consolidated Interim Financial Statements](index=15&type=section&id=Unaudited%20condensed%20consolidated%20interim%20financial%20statements) The unaudited condensed consolidated interim financial statements detail the company's financial position, performance, and cash flows, reflecting significant growth and strategic acquisitions [Consolidated Financial Statements](index=17&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for 9M 2022 show significant growth, with total assets reaching BRL 2.43 billion and net revenue at BRL 1.58 billion, despite a net cash outflow from operating activities [Statement of Profit or Loss](index=18&type=section&id=Unaudited%20condensed%20consolidated%20statements%20of%20profit%20or%20loss) For 9M 2022, net revenue surged 59.6% to BRL 1,575.9 million, with gross profit increasing 56.3% and net profit growing 16.7% to BRL 95.8 million Key Profit or Loss Items (in BRL thousands) | Metric | 9M 2022 | 9M 2021 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | 1,575,905 | 987,586 | +59.6% | | Gross Profit | 541,794 | 346,600 | +56.3% | | Operating Profit | 187,374 | 165,746 | +13.0% | | Net Profit for the period | 95,830 | 82,129 | +16.7% | | Earnings per share – basic (in BRL) | 0.72 | 0.68 | +5.9% | [Statement of Financial Position](index=17&type=section&id=Unaudited%20condensed%20consolidated%20statements%20of%20financial%20position) As of September 30, 2022, total assets reached BRL 2.43 billion, with a significant shift from cash to intangible assets and goodwill due to acquisitions Key Balance Sheet Items (in BRL thousands) | Metric | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and financial investments | 333,707 | 934,513 | | Intangible assets and goodwill | 1,123,626 | 738,803 | | **Total Assets** | **2,429,911** | **2,362,344** | | **Liabilities & Equity** | | | | Loans and borrowings | 706,358 | 788,709 | | Accounts payable for business combination | 119,226 | 85,726 | | **Total Liabilities** | **1,324,507** | **1,273,049** | | **Total Equity** | **1,105,404** | **1,089,295** | [Statement of Cash Flows](index=21&type=section&id=Unaudited%20condensed%20consolidated%20statements%20of%20cash%20flows) For 9M 2022, the company reported a net cash outflow from operating activities of BRL 60.7 million, with investing activities generating BRL 176.0 million, primarily from financial investment redemptions Cash Flow Summary (9M 2022 vs 9M 2021, in BRL thousands) | Activity | 9M 2022 | 9M 2021 | | :--- | :--- | :--- | | Net cash (used in)/from operating activities | (60,711) | 39,451 | | Net cash from/(used in) investment activities | 175,987 | (663,896) | | Net cash (used in)/from financing activities | (102,800) | 585,724 | | **Net (decrease)/increase in cash** | **12,476** | **(38,721)** | - Cash used for acquisitions in 9M 2022 totaled **BRL 321.8 million** for Somo, Box 1824, and Transpire, offset by a **BRL 582.4 million** redemption of financial investments[55](index=55&type=chunk) [Notes to the Financial Statements](index=23&type=section&id=Notes%20to%20the%20unaudited%20condensed%20consolidated%20interim%20financial%20statements) The notes detail significant accounting policies and events, focusing on 2022 business combinations, diversified revenue streams, financial risk management, and stock-based compensation plans [Business Combinations](index=24&type=section&id=2%20Business%20combination) In 2022, CI&T significantly expanded its global presence and capabilities through strategic acquisitions of Somo, Box 1824, and Transpire, adding substantial goodwill - Acquired **Somo Global Ltd** on January 27, 2022, for a total consideration of **BRL 447.4 million**, resulting in **BRL 317.2 million** of goodwill[76](index=76&type=chunk)[79](index=79&type=chunk)[83](index=83&type=chunk) - Acquired **Box 1824** on June 1, 2022, for a total consideration of **BRL 34.2 million**, resulting in **BRL 21.5 million** of goodwill[85](index=85&type=chunk)[89](index=89&type=chunk)[96](index=96&type=chunk) - Acquired **Transpire Technology Pty Ltda** on September 1, 2022, for a total consideration of **BRL 76.6 million**, resulting in a preliminary goodwill of **BRL 75.0 million**[100](index=100&type=chunk)[103](index=103&type=chunk)[108](index=108&type=chunk) - Subsequent to the reporting period, on November 1, 2022, the company completed the acquisition of **NTERSOL Consulting LLC** to expand its financial services expertise in North America[286](index=286&type=chunk) [Revenue Analysis](index=56&type=section&id=19%20Net%20revenue) The company's 9M 2022 net revenue, primarily from software development, is diversified across geographies and industries, with NAE as the largest region and financial services as the top vertical Net Revenue by Geography (9M22, in BRL thousands) | Region | 9M22 Revenue | % of Total | | :--- | :--- | :--- | | NAE (North America & Europe) | 798,751 | 50.7% | | LATAM (Latin America) | 724,480 | 46.0% | | APJ (Asia, Pacific & Japan) | 52,674 | 3.3% | | **Total** | **1,575,905** | **100.0%** | Net Revenue by Industry (9M22, in BRL thousands) | Industry | 9M22 Revenue | % of Total | | :--- | :--- | :--- | | Financial Services | 476,250 | 30.2% | | Food and Beverages | 316,891 | 20.1% | | Technology, Media and Telecom | 215,153 | 13.7% | | Pharmaceuticals and Cosmetics | 208,837 | 13.3% | | Others | 358,774 | 22.7% | | **Total** | **1,575,905** | **100.0%** | - The top client accounted for **16%** of net revenue in 9M22 (**BRL 249.4 million**), while the top 10 clients accounted for **51.6%** (**BRL 812.8 million**)[285](index=285&type=chunk) [Financial Instruments and Risk Management](index=60&type=section&id=24%20Financial%20instruments%20and%20risk%20management) The company manages foreign exchange risk, primarily from USD and GBP revenue exposure against BRL expenses, through cash flow hedge accounting using non-derivative financial instruments - The Group is exposed to foreign exchange risk as revenue is mainly in foreign currency while expenses are mainly in BRL[230](index=230&type=chunk)[231](index=231&type=chunk) - The company applies cash flow hedge accounting to mitigate exchange rate risk on highly probable future acquisitions and future export revenues, using non-derivative financial instruments like USD-denominated investments and debt[234](index=234&type=chunk)[241](index=241&type=chunk) Net Foreign Currency Exposure (as of Sep 30, 2022, in BRL thousands) | Currency | Net Exposure | | :--- | :--- | | USD | 169,030 | | GBP | (47,817) | | Other | 8,795 | [Stock Option and Share-Based Compensation](index=50&type=section&id=17%20Stock%20option%20plan%20and%20share-based%20compensation) The company maintains various stock option and share-based compensation plans to incentivize employees, with BRL 1.9 million in expenses recognized for 9M 2022 - The company has multiple stock option plans, including equity-settled and cash-settled programs, which were migrated from its Brazilian subsidiary to the parent company during its corporate restructuring[167](index=167&type=chunk)[181](index=181&type=chunk) - A new equity-settled stock option plan was approved on June 9, 2022[177](index=177&type=chunk) - Total expenses related to share-based compensation recognized in the statement of profit or loss for the nine months ended September 30, 2022, were **BRL 1,894 thousand**[192](index=192&type=chunk)

| --- | --- | --- | |-------|-------|-------| | | | | | | | | | | | | | | | | | | | | TODAY'S SPEAKERS Cesar Gon Founder & CEO Bruno Guicardi Founder & NAE President https://www.linkedin.com/in/ cesargon/ https://www.linkedin.com/in/ bguicardi/ https://www.linkedin.com/in/ stanley-rodrigues-152113/ Stanley Rodrigues Partner, CFO Eduardo Galvão Head of IR https://www.linkedin.com/in/ eduardo-galv%C3%A3o-b4 7bb315/ Q&A SESSION Submit your question via email to INVESTORS@CIANDT.COM investors.ciandt.com SAFE HA ...

CI&T, Inc. (NYSE:CINT) Q2 2022 Earnings Conference Call August 18, 2022 8:00 AM ET Company Participants Eduardo Galvao - Head of Investor Relations Cesar Gon - Chief Executive Officer Bruno Guicardi - Co-Founder and President, North America and Europe Stanley Rodrigues - Chief Financial Officer Gabriel Marostegam - Head of Data, CI&T, Member of Data Analytics Powerhouse Leadership Team Paula Englert - CEO, Box 1824 Conference Call Participants Ashwin Shirvaikar - from Citi Diego Aragão - Goldman Sachs Tyler ...

[2Q22 Earnings Release](index=2&type=section&id=ITEM%201.%202Q22%20Earnings%20Release) [Second Quarter and Six-Month Operating and Financial Highlights](index=3&type=section&id=1.1.%20Second%20Quarter%20and%20Six-Month%20Operating%20and%20Financial%20Highlights) CI&T achieved strong financial and operational results in the second quarter and six months ended June 30, 2022, with significant growth in net revenue, adjusted EBITDA, and customer and employee numbers **2Q22 Operating and Financial Highlights:** | Metric | 2Q22 (Million Brazilian Reais) | YoY Growth | | :--- | :--- | :--- | | Net Revenue | 525.0 | 67% | | Net Revenue Growth at Constant Currency | - | 73% | | Number of Clients (Annual Revenue > R$1 Million) | 127 | Up from 110 in 1Q22 | | Net Profit | 26.0 | -42% | | Adjusted EBITDA | 100.4 | 36% | | Adjusted EBITDA Margin | 19.1% | - | | Adjusted Net Profit | 52.3 | 16% | | Adjusted Net Profit Margin | 10% | - | | CI&T Employees | 6,768 | 68% (Net increase of 2,734) | **6M22 Operating and Financial Highlights:** | Metric | 6M22 (Million Brazilian Reais) | YoY Growth | | :--- | :--- | :--- | | Net Revenue | 1,016.9 | 66% | | Net Revenue Growth at Constant Currency | - | 74% | | Net Profit | 55.2 | -35% | | Adjusted EBITDA | 186.5 | 31% | | Adjusted EBITDA Margin | 18.3% | - | | Adjusted Net Profit | 93.3 | 10% | [CEO Comments](index=3&type=section&id=1.2.%20CEO%20Comments) CI&T's Founder and CEO, Cesar Gon, expressed satisfaction with the company's Q2 2022 performance, highlighting robust profitability, sustainable growth, and recognition as a leader in modern application development services - CEO Cesar Gon expressed satisfaction with 2Q22 results, noting **robust profitability** and **sustainable growth**[10](index=10&type=chunk) - Growth drivers include expanded collaboration with existing clients, new client acquisition, and programmatic M&A strategy[10](index=10&type=chunk) - CI&T was recognized by Forrester as a leader in modern application development services, reflecting its capabilities in digital transformation and efficiency improvement[10](index=10&type=chunk) [Comments on 2Q22 and 6M22 Financial Performance](index=4&type=section&id=1.3.%20Comments%20on%202Q22%20and%206M22%20Financial%20Performance) This section details CI&T's financial performance for the second quarter and first half of 2022, analyzing year-over-year changes and key drivers across net revenue, costs, gross profit, SG&A, adjusted EBITDA, net financial expenses, depreciation, amortization, and net profit [Net Revenue](index=4&type=section&id=1.3.1.%20Net%20Revenue) This section analyzes the company's net revenue performance for Q2 and H1 2022, highlighting growth drivers, market contributions, and the impact of foreign exchange fluctuations **Net Revenue (Thousand Brazilian Reais):** | Metric | 2Q22 | 2Q21 | 2Q22 vs 2Q21 Change | 6M22 | 6M21 | 6M22 vs 6M21 Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Revenue | 525,015 | 315,324 | 66.5% | 1,016,887 | 611,616 | 66.3% | | Net Revenue at Constant Currency | 549,961 | 317,995 | 72.9% | 1,065,309 | 611,905 | 74.1% | - 2Q22 net revenue was **R$525.0 million**, a **66.5% year-over-year increase**, with acquisitions of Somo and Box 1824 contributing 13 percentage points to revenue growth[13](index=13&type=chunk) - The US market was CI&T's largest organic growth market, while European growth was primarily driven by the Somo acquisition, and the top ten clients' revenue share decreased from 73% in 2Q21 to **52% in 2Q22**, indicating client base diversification[13](index=13&type=chunk) - Brazilian Real appreciation against the US Dollar and British Pound impacted revenue conversion for North American and European operations, with 2Q22 net revenue growing **73% at constant currency**[14](index=14&type=chunk) [Revenue Breakdown by Industry and Geography](index=4&type=section&id=1.3.2.%20Revenue%20Breakdown%20by%20Industry%20and%20Geography) This section provides a detailed breakdown of net revenue by industry vertical and geographical region, illustrating key growth areas and market contributions **Net Revenue by Industry (Thousand Brazilian Reais):** | Industry | 2Q22 | 2Q21 | 2Q22 vs 2Q21 Change | 6M22 | 6M21 | 6M22 vs 6M21 Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Financial Services | 161,466 | 111,268 | 45.1% | 315,064 | 210,089 | 50.0% | | Food and Beverage | 107,988 | 88,112 | 22.6% | 202,056 | 172,169 | 17.4% | | Technology, Media and Telecommunications | 69,690 | 30,142 | 131.2% | 137,443 | 62,491 | 119.9% | | Pharma and Cosmetics | 70,568 | 45,798 | 54.1% | 133,990 | 87,604 | 52.9% | | Retail and Manufacturing | 31,624 | 18,232 | 73.4% | 67,053 | 34,210 | 96.0% | | Education and Services | 16,965 | 11,446 | 48.2% | 36,653 | 23,638 | 55.1% | | Logistics and Transportation | 17,596 | 4,923 | 257.4% | 34,632 | 10,155 | 241.0% | | Other | 49,118 | 5,403 | 809.2% | 89,996 | 11,260 | 699.3% | | **Total** | **525,015** | **315,324** | **66.5%** | **1,016,887** | **611,616** | **66.3%** | - Financial Services and Food and Beverage remain key markets, while Technology, Media and Telecommunications (TMT) and Retail and Manufacturing sectors show significant growth and increasing importance in the client portfolio[15](index=15&type=chunk) **Net Revenue by Geography (Thousand Brazilian Reais):** | Geography | 2Q22 | 2Q21 | 2Q22 vs 2Q21 Change | 6M22 | 6M21 | 6M22 vs 6M21 Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | North America and Europe (NAE) | 267,464 | 159,187 | 68.0% | 508,993 | 312,810 | 62.7% | | North America | 219,304 | 152,574 | 43.7% | 423,244 | 301,584 | 40.3% | | Europe | 48,160 | 6,613 | 628.3% | 85,749 | 11,226 | 663.8% | | Latin America (LATAM) | 242,574 | 146,641 | 65.4% | 477,280 | 277,818 | 71.8% | | Asia, Pacific and Japan (APJ) | 14,977 | 9,496 | 57.7% | 30,614 | 20,988 | 45.9% | [Cost of Services Provided and Adjusted Gross Profit](index=5&type=section&id=1.3.3.%20Cost%20of%20Services%20Provided%20and%20Adjusted%20Gross%20Profit) This section examines the cost of services and adjusted gross profit, analyzing their changes and the factors influencing gross margin performance **Gross Profit (Thousand Brazilian Reais):** | Metric | 2Q22 | 2Q21 | 2Q22 vs 2Q21 Change | 6M22 | 6M21 | 6M22 vs 6M21 Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Revenue | 525,015 | 315,324 | 66.5% | 1,016,887 | 611,616 | 66.3% | | Cost of Services | (341,502) | (205,768) | 66.0% | (670,494) | (394,140) | 70.1% | | Gross Profit | 183,513 | 109,556 | 67.5% | 346,393 | 217,476 | 59.3% | | Adjusted Gross Profit | 193,447 | 116,287 | 66.4% | 366,828 | 230,484 | 59.2% | | Adjusted Gross Margin | 36.8% | 36.9% | 0p.p | 36.1% | 37.7% | -1.6p.p | - 2Q22 cost of services was **R$341.5 million**, a **66.0% year-over-year increase**, with adjusted gross profit at **R$193.5 million**, up **66.4%**, and an adjusted gross margin of **36.8%**[21](index=21&type=chunk) - 2Q22 gross margin remained largely stable year-over-year, while the 6M22 gross margin decreased by **1.6 percentage points**, primarily due to foreign exchange fluctuations and the lower margins of recently acquired companies[22](index=22&type=chunk) [SG&A and Other Expenses](index=6&type=section&id=1.3.4.%20SG%26A%20and%20Other%20Expenses) This section details the changes in selling, general, and administrative expenses and other operating costs, identifying the primary drivers behind their increase **SG&A Expenses (Thousand Brazilian Reais):** | Metric | 2Q22 | 2Q21 | 2Q22 vs 2Q21 Change | 6M22 | 6M21 | 6M22 vs 6M21 Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | (39,962) | (18,801) | 112.6% | (75,091) | (37,780) | 98.8% | | General and Administrative Expenses | (78,390) | (28,328) | 176.7% | (143,311) | (54,054) | 165.1% | | Total SG&A Expenses | (118,352) | (47,129) | 151.1% | (218,402) | (91,834) | 137.8% | | Other Income (Expenses) Net | (3,969) | (184) | n.m | (4,484) | 1,406 | - | | Impairment Losses on Trade Receivables and Contract Assets | 356 | 2,891 | -87.7% | (710) | (367) | 93.5% | | Total SG&A and Other Operating Expenses | (121,965) | (44,422) | 174.6% | (223,596) | (90,795) | 146.3% | - 2Q22 selling, general, and administrative (SG&A) expenses increased by **151.1% year-over-year**, mainly driven by team expansion recruitment and retention, acquisition-related costs (including intangible asset amortization), and strengthening of back-office teams post-IPO[24](index=24&type=chunk) [Adjusted EBITDA](index=6&type=section&id=1.3.5.%20Adjusted%20EBITDA) This section analyzes the adjusted EBITDA and its margin, explaining the factors contributing to its year-over-year and sequential changes **Adjusted EBITDA (Thousand Brazilian Reais):** | Metric | 2Q22 | 2Q21 | 2Q22 vs 2Q21 Change | 6M22 | 6M21 | 6M22 vs 6M21 Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Profit | 25,999 | 44,722 | -41.9% | 55,222 | 84,337 | -34.5% | | Adjustments: | | | | | | | | Net Financial Costs | 17,533 | 1,989 | 781.5% | 34,245 | 3,686 | 829.1% | | Income Tax Expense | 18,016 | 18,423 | -2.2% | 33,330 | 38,658 | -13.8% | | Depreciation and Amortization | 24,205 | 8,224 | 194.3% | 43,596 | 16,019 | 172.2% | | Share-based Compensation | (106) | 328 | - | 1,133 | 501 | 126.1% | | Consulting Fees | 6,395 | 237 | n.m | 9,090 | 462 | n.m | | Government Grants | (115) | (9) | n.m | (174) | (1,414) | -87.7% | | Write-off | - | - | 0.0% | 1,548 | - | 0.0% | | Acquisition-related Expenses | 8,464 | - | 0.0% | 8,464 | - | 0.0% | | **Adjusted EBITDA** | **100,391** | **73,915** | **35.8%** | **186,454** | **142,249** | **31.1%** | | **Adjusted EBITDA Margin** | **19.1%** | **23.4%** | **-4.3p.p** | **18.3%** | **23.3%** | **-4.9p.p** | - 2Q22 adjusted EBITDA was **R$100.4 million**, a **35.8% year-over-year increase**, with an adjusted EBITDA margin of **19.1%**, down **4.3 percentage points** year-over-year, primarily due to increased SG&A expenses[27](index=27&type=chunk) - Adjusted EBITDA margin improved sequentially from **17.5% in 1Q22 to 19.1% in 2Q22**, benefiting from seasonal factors such as gradual contract price adjustments and higher utilization rates[27](index=27&type=chunk) [Net Financial Expenses](index=7&type=section&id=1.3.6.%20Net%20Financial%20Expenses) This section discusses the significant increase in net financial expenses, primarily attributed to debt incurred for a major acquisition - 2Q22 net financial expenses were **R$17.5 million**, compared to **R$2.0 million in 2Q21**, mainly due to debt incurred to finance the **R$650 million Dextra acquisition** in July 2021[28](index=28&type=chunk) [Depreciation and Amortization](index=7&type=section&id=1.3.7.%20Depreciation%20and%20Amortization) This section highlights the increase in depreciation and amortization expenses, largely driven by the amortization of intangible assets from recent acquisitions - 2Q22 depreciation and amortization expenses totaled **R$24.2 million**, an increase of **R$15.9 million** from 2Q21, primarily due to **R$11.3 million** in intangible asset amortization from acquired companies[28](index=28&type=chunk) [Income Tax Expense](index=7&type=section&id=1.3.8.%20Income%20Tax%20Expense) This section outlines the income tax expense for the quarter and six-month period, noting a slight decrease and the effective cash tax rate - 2Q22 income tax expense was **R$18.0 million**, a **2.2% year-over-year decrease**, while 6M22 income tax expense was **R$33.3 million**, down **13.8%**, with a cash tax rate of **17%**[29](index=29&type=chunk) [Net Profit](index=7&type=section&id=1.3.9.%20Net%20Profit) This section presents the net profit and adjusted net profit, along with their respective margins, and explains the factors contributing to their changes **Net Profit (Thousand Brazilian Reais):** | Metric | 2Q22 | 2Q21 | 2Q22 vs 2Q21 Change | 6M22 | 6M21 | 6M22 vs 6M21 Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Profit | 25,999 | 44,722 | -41.9% | 55,222 | 84,337 | -34.5% | | Adjusted Net Profit | 52,253 | 44,959 | 16.2% | 93,347 | 84,799 | 10.1% | | Adjusted Net Profit Margin | 10.0% | 14.3% | -4.3p.p | 9.2% | 13.9% | -4.7p.p | - 2Q22 net profit was **R$26.0 million**, a **41.9% year-over-year decrease**, while adjusted net profit was **R$52.3 million**, a **16.0% increase**, with an adjusted net profit margin of **10.0%**[31](index=31&type=chunk) - The decrease in adjusted net profit margin was primarily due to increased SG&A and financial expenses[31](index=31&type=chunk) [Business Outlook](index=7&type=section&id=1.4.%20Business%20Outlook) CI&T updated its 2022 business outlook, projecting at least R$540 million in net revenue for Q3, a 46% year-over-year increase at constant currency, and full-year net revenue growth of at least 55% at constant currency with an adjusted EBITDA margin of at least 19% - Expected 2022 third-quarter net revenue of at least **R$540 million**, representing **46% year-over-year growth at constant currency** and **44% on a reported basis**[32](index=32&type=chunk) - Updated 2022 full-year outlook projects net revenue growth of at least **55% at constant currency** and at least **49% on a reported basis** (including approximately 6 percentage points of negative foreign exchange impact)[33](index=33&type=chunk) - Expected 2022 full-year adjusted EBITDA margin of at least **19%**, assuming an average exchange rate of **R$5.10 to US$1.00** for the full year[34](index=34&type=chunk) [Company Information and Non-IFRS Measures](index=8&type=section&id=1.5.%20Company%20Information%20and%20Non-IFRS%20Measures) This section provides CI&T's company profile, accounting basis, functional currency, detailed explanations of non-IFRS financial measures and their calculation, and a cautionary statement regarding forward-looking statements [Conference Call Information](index=8&type=section&id=1.5.1.%20Conference%20Call%20Information) This section provides details regarding the conference call held by CI&T's management to discuss the Q2 and H1 2022 financial and operating results - CI&T management held a video conference call on August 18, 2022, to discuss 2Q22 and 6M22 financial and operating results[36](index=36&type=chunk) [About CI&T](index=8&type=section&id=1.5.2.%20About%20CI%26T) This section provides an overview of CI&T as a global digital specialist, highlighting its services, experience, and global presence - CI&T is a global digital specialist providing end-to-end digital transformation services to over 100 large enterprises and fast-growing clients[37](index=37&type=chunk) - The company has **27 years of experience** accelerating business impact through complete and scalable digital solutions, with operations in **9 countries** and over **6,700 professionals** globally[37](index=37&type=chunk) [Basis of Accounting and Functional Currency](index=8&type=section&id=1.5.3.%20Basis%20of%20Accounting%20and%20Functional%20Currency) This section clarifies CI&T's accounting and reporting currency, along with the functional currencies used by its various subsidiaries - CI&T uses the Brazilian Real as its accounting and reporting currency, preparing financial statements in accordance with International Financial Reporting Standards (IFRS)[38](index=38&type=chunk) - The company's subsidiaries have various functional currencies, including Brazilian Real, US Dollar, Japanese Yen, Euro, Australian Dollar, British Pound, and Colombian Peso[120](index=120&type=chunk) [Non-IFRS Financial Measures](index=8&type=section&id=1.5.4.%20Non-IFRS%20Financial%20Measures) This section explains the non-IFRS financial measures used by the company to assess business performance, emphasizing their supplementary nature and the limitations of forward-looking non-IFRS reconciliations - The company regularly monitors non-IFRS financial metrics, including adjusted gross profit, adjusted gross margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net profit, adjusted net profit margin, net revenue at constant currency, and net revenue growth at constant currency, to evaluate business performance[39](index=39&type=chunk) - These non-IFRS metrics are supplementary and should not replace IFRS results, and their calculation methods may differ from those used by other companies[39](index=39&type=chunk) - The company does not provide quantitative reconciliations of forward-looking non-IFRS metrics to the most directly comparable IFRS metrics, as it cannot reasonably predict the ultimate outcome of certain material items such as share-based compensation, acquisition expenses, and tax impacts of non-IFRS adjustments[40](index=40&type=chunk) [Cautionary Statement on Forward-Looking Statements](index=9&type=section&id=1.5.5.%20Cautionary%20Statement%20on%20Forward-Looking%20Statements) This section warns that the press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from expectations - This press release contains "forward-looking statements" subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from expectations[46](index=46&type=chunk) - Risk factors include, but are not limited to, the COVID-19 pandemic, the war in Ukraine, competitive impacts, ability to maintain client relationships, successful integration of Dextra, Somo, and Box 1824, and the ability to execute growth strategies[46](index=46&type=chunk) [Contacts](index=9&type=section&id=1.5.6.%20Contacts) This section provides contact information for investor relations and media inquiries - Investor Relations contact: Eduardo Galvão (investors@ciandt.com); Media Relations contact: Zella Panossian (ciandt@illumepr)[47](index=47&type=chunk) [Unaudited Condensed Consolidated Interim Financial Information for the Three and Six-Month Periods Ended June 30, 2022 and 2021](index=10&type=section&id=ITEM%202.%20Unaudited%20condensed%20consolidated%20interim%20financial%20information%20for%20the%20three%20and%20six-%20month%20periods%20ended%20June%2030%2C%202022%20and%202021) This section presents CI&T's unaudited condensed consolidated interim financial information for the three and six-month periods ended June 30, 2022 and 2021 [Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=2.1.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents CI&T's unaudited condensed consolidated financial statements, including the statements of profit or loss, financial position, other comprehensive income, changes in equity, and cash flows, for the three and six-month periods ended June 30, 2022, and comparative periods [Statements of Profit or Loss](index=10&type=section&id=2.1.1.%20Statements%20of%20Profit%20or%20Loss) This section provides the unaudited condensed consolidated statements of profit or loss, detailing revenues, costs, and expenses for the reported periods **Unaudited Condensed Consolidated Statements of Profit or Loss (Thousand Brazilian Reais):** | Metric | 2Q22 | 2Q21 | 6M22 | 6M21 | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | 525,015 | 315,324 | 1,016,887 | 611,616 | | Cost of Services | (341,502) | (205,768) | (670,494) | (394,140) | | Gross Profit | 183,513 | 109,556 | 346,393 | 217,476 | | Selling Expenses | (39,962) | (18,801) | (75,091) | (37,780) | | General and Administrative Expenses | (78,390) | (28,328) | (143,311) | (54,054) | | Operating Profit (before tax and financial income) | 61,548 | 65,134 | 122,797 | 126,681 | | Net Financial Costs | (17,533) | (1,989) | (34,245) | (3,686) | | Profit before Income Tax | 44,015 | 63,145 | 88,552 | 122,995 | | Income Tax Expense | (18,016) | (18,423) | (33,330) | (38,658) | | Net Profit for the Period | 25,999 | 44,722 | 55,222 | 84,337 | | Earnings Per Share – Basic (R$) | 0.20 | 0.37 | 0.42 | 0.70 | | Earnings Per Share – Diluted (R$) | 0.20 | 0.37 | 0.42 | 0.69 | [Statements of Financial Position](index=11&type=section&id=2.1.2.%20Statements%20of%20Financial%20Position) This section presents the unaudited condensed consolidated statements of financial position, outlining assets, liabilities, and equity as of the reported dates **Unaudited Condensed Consolidated Statements of Financial Position (Thousand Brazilian Reais):** | Assets | June 30, 2022 | December 31, 2021 | Liabilities and Equity | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Current Assets:** | | | **Current Liabilities:** | | | | Cash and Cash Equivalents | 104,190 | 135,727 | Suppliers and Other Payables | 24,655 | 33,566 | | Financial Investments | 253,304 | 798,786 | Loans and Borrowings | 183,465 | 164,403 | | Trade Receivables | 416,728 | 340,519 | Lease Liabilities | 27,548 | 21,214 | | Contract Assets | 231,695 | 134,388 | Salaries and Welfare Charges | 214,367 | 234,173 | | **Non-Current Assets:** | | | **Non-Current Liabilities:** | | | | Deferred Tax Assets | 22,954 | 31,989 | Loans and Borrowings | 489,777 | 624,306 | | Property, Plant and Equipment | 60,962 | 57,721 | Lease Liabilities | 55,688 | 60,674 | | Intangible Assets and Goodwill | 1,078,187 | 738,803 | Provisions | 14,586 | 633 | | Right-of-Use Assets | 73,998 | 73,827 | | | | | **Total Assets** | **2,365,002** | **2,362,344** | **Total Equity and Liabilities** | **2,365,002** | **2,362,344** | [Statements of Other Comprehensive Income](index=17&type=section&id=2.1.3.%20Statements%20of%20Other%20Comprehensive%20Income) This section provides the unaudited condensed consolidated statements of other comprehensive income, detailing items that are not recognized in profit or loss **Unaudited Condensed Consolidated Statements of Other Comprehensive Income (Thousand Brazilian Reais):** | Metric | 6M22 | 2Q22 | 6M21 | 2Q21 | | :--- | :--- | :--- | :--- | :--- | | Net Profit for the Period | 55,222 | 25,999 | 84,337 | 44,722 | | **Other Comprehensive Income (OCI):** | | | | | | Exchange differences on translation of foreign operations | (69,688) | 23,687 | 8,651 | (6,155) | | Cash flow hedges – effective portion of changes in fair value | (39,735) | (4,011) | - | - | | **Total Comprehensive (Loss) Income for the Period** | **(54,201)** | **45,675** | **92,988** | **38,567** | [Statements of Changes in Equity](index=19&type=section&id=2.1.4.%20Statements%20of%20Changes%20in%20Equity) This section presents the unaudited condensed consolidated statements of changes in equity, showing movements in share capital, reserves, and retained earnings **Unaudited Condensed Consolidated Statements of Changes in Equity (Thousand Brazilian Reais):** | Metric | Share Capital | Share Premium | Capital Reserve | Profit Reserve | Retained Earnings | Other Comprehensive Income | Total Equity | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at December 31, 2021 | 36 | 915,947 | 10,105 | 125,957 | - | 37,250 | 1,089,295 | | Net Profit for the Period | - | - | - | - | 55,222 | - | 55,222 | | Business Combination (Somo) | - | 14,037 | - | - | - | - | 14,037 | | Business Combination (Box) | - | - | 4,124 | - | - | - | 4,124 | | Exercise of Stock Options | 1 | - | 8,893 | - | - | - | 8,894 | | Share-based Compensation | - | - | 674 | - | - | - | 674 | | Exchange differences on translation of foreign operations | - | - | - | - | - | (69,688) | (69,688) | | Cash Flow Hedges | - | - | - | - | - | (39,735) | (39,735) | | Balance at June 30, 2022 | 37 | 929,984 | 23,796 | 125,957 | 55,222 | (72,173) | 1,062,823 | [Statements of Cash Flows](index=21&type=section&id=2.1.5.%20Statements%20of%20Cash%20Flows) This section provides the unaudited condensed consolidated statements of cash flows, categorizing cash movements into operating, investing, and financing activities **Unaudited Condensed Consolidated Statements of Cash Flows (Thousand Brazilian Reais):** | Metric | June 30, 2022 | June 30, 2021 | | :--- | :--- | :--- | | **Cash Flows from Operating Activities:** | | | | Net Profit for the Period | 55,222 | 84,337 | | Net Cash (Used in)/Generated from Operating Activities | (87,109) | 23,506 | | Income Tax Paid | (21,074) | (23,321) | | Interest Paid on Loans and Borrowings | (38,379) | (1,966) | | Interest Paid on Leases | (3,174) | (2,607) | | **Net Cash Used in Operating Activities** | **(149,736)** | **(4,388)** | | **Cash Flows from Investing Activities:** | | | | Acquisition of Property, Plant and Equipment and Intangible Assets | (15,520) | (17,164) | | Acquisition of Subsidiaries (net of cash) – Box 1824 | (19,040) | - | | Acquisition of Subsidiaries (net of cash) – Somo | (247,764) | - | | Redemption of Financial Investments | 514,394 | - | | **Net Cash Flows from Investing Activities** | **225,143** | **(17,164)** | | **Cash Flows from Financing Activities:** | | | | Proceeds from Loans and Borrowings | 133,789 | 88,496 | | Payment of Lease Liabilities | (12,576) | (7,854) | | Payment of Loans and Borrowings | (244,384) | (68,265) | | **Net Cash Flows from Financing Activities** | **(115,042)** | **(58,431)** | | **Net Decrease in Cash and Cash Equivalents** | **(39,635)** | **(79,983)** | | Cash and Cash Equivalents at Beginning of Period | 135,727 | 162,827 | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | 8,098 | 5,713 | | **Cash and Cash Equivalents at End of Period** | **104,190** | **80,805** | [Notes to the Unaudited Condensed Consolidated Interim Financial Statements](index=22&type=section&id=2.2.%20Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed notes to CI&T's unaudited condensed consolidated interim financial statements, covering reporting entity, business combinations, accounting policies, functional currency, use of judgments and estimates, and various financial statement line items [Reporting Entity](index=22&type=section&id=2.2.1.%20Reporting%20Entity) This section describes CI&T Inc. as a Cayman Islands-registered public company, its primary business activities, and key corporate events including its IPO and reorganization - CI&T Inc. is a public company registered in the Cayman Islands in June 2021, primarily investing in subsidiaries in Brazil and other countries[69](index=69&type=chunk) - The company's subsidiaries specialize in custom software development, offering solutions in machine learning, artificial intelligence, analytics, cloud, and mobile technologies[69](index=69&type=chunk) - On November 10, 2021, the company completed its Initial Public Offering (IPO), issuing **15,000,000 Class A common shares** and raising net proceeds of **R$860.993 million (US$156.667 million)**[71](index=71&type=chunk) - The company underwent a corporate reorganization on October 4, 2021, making CI&T Inc. the controlling entity of CI&T Software S.A., with earnings per share calculated retrospectively to January 1, 2020[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) [Business Combination](index=23&type=section&id=2.2.2.%20Business%20Combination) This section details the company's significant business acquisitions, including Dextra, Somo, and Box 1824, outlining their acquisition dates, consideration, and the resulting goodwill [Dextra Acquisition](index=23&type=section&id=2.2.2.1.%20Dextra%20Acquisition) This section provides details on the acquisition of Dextra Investimentos S.A., including the total consideration and the primary drivers for the recognized goodwill - On August 10, 2021, CI&T Brazil completed the acquisition of **100% of Dextra Investimentos S.A. and its subsidiaries** for a total consideration of **R$800 million**[76](index=76&type=chunk)[77](index=77&type=chunk) **Dextra Acquisition Consideration (Thousand Brazilian Reais):** | Item | Amount | | :--- | :--- | | Cash | 700,938 | | Accounts Payable for Business Combination | 82,635 | | **Total Consideration** | **783,573** | - The acquisition generated **goodwill of R$595.721 million**, primarily attributed to Dextra employees' skills and technical talent, along with anticipated synergies from integration[84](index=84&type=chunk) [Somo Acquisition](index=25&type=section&id=2.2.2.2.%20Somo%20Acquisition) This section details the acquisition of Somo Global Ltd, including the acquisition date, consideration components, and the resulting goodwill - On January 27, 2022, the company completed the acquisition of **100% of Somo Global Ltd and its subsidiaries**, a UK-based digital product agency[86](index=86&type=chunk) **Somo Acquisition Consideration (Thousand Brazilian Reais):** | Item | Amount | | :--- | :--- | | Cash | 340,777 | | Escrow Account | 23,061 | | Holdback Amount | 7,206 | | Earn-out Payment | 59,868 | | Issuance of Class A Common Shares | 14,037 | | **Total Consideration** | **447,414** | - The acquisition generated **goodwill of R$317.179 million**, primarily attributed to Somo employees' skills and technical talent, along with anticipated synergies from integration[100](index=100&type=chunk) [Box 1824 Acquisition](index=29&type=section&id=2.2.2.3.%20Box%201824%20Acquisition) This section outlines the acquisition of Box 1824 Planejamento e Marketing Ltda, including the acquisition date, consideration, and the preliminary goodwill recognized - On June 1, 2022, the company completed the acquisition of **100% of BOX 1824 PLANEJAMENTO E MARKETING LTDA**, a strategic consulting company[102](index=102&type=chunk) **Box 1824 Acquisition Consideration (Thousand Brazilian Reais):** | Item | Amount | | :--- | :--- | | Cash | 20,768 | | Holdback Amount | 8,871 | | Equity Payment – Immediately Vested | 4,124 | | Other | 974 | | **Total Consideration** | **34,737** | - Preliminary goodwill amounted to **R$26.229 million**, primarily attributed to Box 1824 employees' skills and technical talent, along with anticipated synergies from integration[112](index=112&type=chunk)[113](index=113&type=chunk) [Basis of Accounting](index=32&type=section&id=2.2.3.%20Basis%20of%20Accounting) This section states that the interim financial statements are prepared in accordance with IAS 34 and should be read in conjunction with the annual consolidated financial statements - The unaudited condensed consolidated interim financial statements are prepared in accordance with IAS 34 (Interim Financial Reporting) and should be read in conjunction with the Group's annual consolidated financial statements as of December 31, 2021[117](index=117&type=chunk) [Functional and Presentation Currency](index=32&type=section&id=2.2.4.%20Functional%20and%20Presentation%20Currency) This section specifies the presentation currency of the financial statements and lists the various functional currencies used by the company's subsidiaries - Financial statements are presented in Brazilian Reais (R$), which is the company's functional currency, with all balances rounded to the nearest thousand[119](index=119&type=chunk) - The company's subsidiaries use various functional currencies, including Brazilian Real, US Dollar, Japanese Yen, Euro, Australian Dollar, British Pound, and Colombian Peso[120](index=120&type=chunk) [Use of Judgments and Estimates](index=32&type=section&id=2.2.5.%20Use%20of%20Judgments%20and%20Estimates) This section acknowledges that management makes judgments and estimates in preparing financial statements, and actual results may differ from these estimates - Management exercises judgments and estimates in preparing financial statements, and actual results may differ from these estimates[121](index=121&type=chunk) - Key judgments include lease terms and revenue recognition methods, while key estimation uncertainties involve fair value measurement of subsidiary acquisitions and impairment testing assumptions for intangible assets and goodwill[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) [Cash and Cash Equivalents and Financial Investments](index=33&type=section&id=2.2.6.%20Cash%20and%20Cash%20Equivalents%20and%20Financial%20Investments) This section details the composition of cash and cash equivalents and financial investments, including their types, interest rates, and changes over the period **Cash and Cash Equivalents (Thousand Brazilian Reais):** | Metric | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 62,902 | 69,720 | | Short-term Financial Investments | 41,288 | 66,007 | | **Total** | **104,190** | **135,727** | - Short-term financial investments primarily consist of fixed-income securities with interest rates ranging from **90% to 103.5% of CDI**, offering daily liquidity and no significant risk[130](index=130&type=chunk) **Changes in Financial Investments (Thousand Brazilian Reais):** | Item | Amount | | :--- | :--- | | Balance at January 1, 2022 | 798,786 | | Effect of Exchange Rate Changes | (15,604) | | Financial Investment Income | 651 | | Redemption of Financial Investments | (514,395) | | Realization of Hedge Accounting | (16,134) | | **Balance at June 30, 2022** | **253,304** | - As of June 30, 2022, financial investments totaled **R$253.304 million (US$48.359 million)**, primarily allocated to US Dollar-denominated interest-bearing accounts and time deposits with interest rates between **0.12% and 0.65%**[137](index=137&type=chunk) [Trade Receivables](index=34&type=section&id=2.2.7.%20Trade%20Receivables) This section provides a breakdown of trade receivables by market, an aging analysis, and changes in impairment losses for the period **Trade Receivables (Thousand Brazilian Reais):** | Market | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | US Market | 255,484 | 226,154 | | Brazilian Market | 112,931 | 101,122 | | Other Markets | 48,627 | 14,302 | | Less: Expected Credit Losses | (314) | (1,059) | | **Trade Receivables, Net** | **416,728** | **340,519** | **Aging Analysis of Trade Receivables (Thousand Brazilian Reais):** | Aging | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Not Past Due | 358,359 | 319,450 | | Past Due 1-60 Days | 50,033 | 20,020 | | Past Due 61-360 Days | 8,090 | 1,564 | | Past Due Over 360 Days | 560 | 544 | | **Total** | **417,042** | **341,578** | **Changes in Impairment Losses on Trade Receivables (Thousand Brazilian Reais):** | Item | June 30, 2022 | June 30, 2021 | | :--- | :--- | :--- | | Balance at January 1, 2022 | (1,059) | (692) | | Provision | (449) | (4,705) | | Reversal | 348 | 4,398 | | Write-off | 655 | - | | Exchange Rate Changes | 191 | 33 | | **Balance at June 30, 2022** | **(314)** | **(966)** | [Other Assets](index=35&type=section&id=2.2.8.%20Other%20Assets) This section outlines the composition of other assets, distinguishing between current and non-current portions, and identifies the main components of prepaid expenses **Other Assets (Thousand Brazilian Reais):** | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Prepaid Expenses | 35,480 | 29,743 | | Lease Deposits | 1,970 | 2,471 | | Advances to Suppliers | 141 | 162 | | Other | 2,951 | 592 | | **Total** | **40,542** | **32,968** | | Current | 36,592 | 29,994 | | Non-Current | 3,950 | 2,974 | - Prepaid expenses primarily include prepaid insurance (Directors and Officers liability), consulting fees, and software support prepayments[140](index=140&type=chunk) [Property, Plant and Equipment](index=35&type=section&id=2.2.9.%20Property%2C%20Plant%20and%20Equipment) This section details the composition of property, plant, and equipment, including their depreciation methods and total cost and accumulated depreciation **Property, Plant and Equipment (Thousand Brazilian Reais):** | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | IT Equipment | 41,238 | 35,230 | | Furniture and Fixtures | 5,860 | 6,283 | | Leasehold Improvements | 13,843 | 16,051 | | Construction in Progress | 21 | 157 | | **Total** | **60,962** | **57,721** | - Leasehold improvements are depreciated on a straight-line basis over the term of the lease agreements[141](index=141&type=chunk) - As of June 30, 2022, the total cost of property, plant, and equipment was **R$113.055 million**, with accumulated depreciation of **R$52.093 million**[144](index=144&type=chunk) [Intangible Assets and Goodwill](index=37&type=section&id=2.2.10.%20Intangible%20Assets%20and%20Goodwill) This section provides a breakdown of intangible assets and goodwill, identifying their primary sources and confirming that no impairment indicators were found **Intangible Assets and Goodwill (Thousand Brazilian Reais):** | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Web Software | 2,704 | 2,399 | | Internally Developed Software | 3,169 | 3,911 | | Software Under Development | 842 | 391 | | Client Relationships | 131,471 | 84,195 | | Non-Compete Agreements | 12,381 | 13,897 | | Brands | 19,008 | 14,541 | | **Subtotal** | **169,575** | **119,334** | | **Goodwill** | **908,612** | **619,469** | | **Total** | **1,078,187** | **738,803** | - Client relationships, non-compete agreements, and brands primarily originated from the acquisitions of Dextra, Somo, and Box 1824[146](index=146&type=chunk) - Goodwill primarily resulted from the acquisitions of CI&T IN Software Ltda., CI&T Japan Inc., Comrade Inc., Dextra Technologies S.A., Somo, and Box 1824[147](index=147&type=chunk) - As of June 30, 2022, management found no factors that would significantly alter the assumptions of the annual impairment analysis, thus no impairment indicators for intangible assets and goodwill were identified[150](index=150&type=chunk) [Leases](index=39&type=section&id=2.2.11.%20Leases) This section details the company's right-of-use assets and lease liabilities, including their composition and the consideration of extension options in lease measurements **Right-of-Use Assets (Thousand Brazilian Reais):** | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Properties | 65,696 | 69,441 | | Vehicles | 8,231 | 4,173 | | IT Equipment | 71 | 213 | | **Total** | **73,998** | **73,827** | - Some of the Group's lease contracts include indefinite extension options, and reasonably certain extension options have been considered in the measurement of lease amounts[151](index=151&type=chunk) **Lease Liabilities (Thousand Brazilian Reais):** | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Properties | 74,446 | 77,366 | | Vehicles | 8,704 | 4,285 | | IT Equipment | 86 | 237 | | **Total** | **83,236** | **81,888** | | Current | 27,548 | 21,214 | | Non-Current | 55,688 | 60,674 | [Loans and Borrowings](index=41&type=section&id=2.2.12.%20Loans%20and%20Borrowings) This section provides a detailed breakdown of the company's loans and borrowings by lender, currency, interest rate, and maturity, along with their term structure and covenant requirements **Loans and Borrowings (Thousand Brazilian Reais):** | Lender | Currency | Average Annual Interest Rate (%) | Maturity Year | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Itaú | USD | 4.82% | 2022 | 315 | 2,349 | | Banco do Brasil | USD | 3.68% | 2022 | 48,748 | 56,551 | | Citibank | USD | 4.06% / 2.47% | 2023 | 24,413 | 28,328 | | Bradesco | BRL | CDI + 1.10% | 2023 | 6,677 | 11,684 | | Citibank | USD | 3.80% | 2023 | 9,988 | - | | Bradesco | USD | 3.98% | 2023 | 14,865 | - | | Bradesco | BRL | CDI + 1.75% | 2026 | 309,295 | 306,417 | | Citibank | USD | Libor 3 months + 2.07% | 2026 | 143,126 | 168,169 | | Santander - CI&T Inc. | USD | 5.02% | 2026 | 115,815 | - | | **Total** | | | | **673,242** | **788,709** | **Maturity Structure of Loans and Borrowings (Thousand Brazilian Reais):** | Maturity Year | Amount | | :--- | :--- | | 2023 | 56,925 | | 2024 | 115,938 | | 2025 | 171,955 | | 2026 | 144,959 | | **Non-Current Liabilities** | **489,777** | - Loans and borrowings are subject to covenant clauses requiring the company to maintain certain ratios, such as net debt/EBITDA, which could lead to early debt maturity if not met[161](index=161&type=chunk) [Salaries and Welfare Charges](index=43&type=section&id=2.2.13.%20Salaries%20and%20Welfare%20Charges) This section details the components of salaries and welfare charges, including salaries, accrued vacation, bonuses, and taxes, along with the changes in bonus accruals **Salaries and Welfare Charges (Thousand Brazilian Reais):** | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Salaries | 30,306 | 31,342 | | Accrued Vacation and Charges | 102,710 | 83,750 | | Accrued (13th Month) Salaries | 2,015 | - | | Bonuses | 34,816 | 72,810 | | Withholding Income Tax | 17,614 | 20,604 | | Payroll Taxes (Social Contributions) | 19,004 | 18,124 | | Other | 7,902 | 7,543 | | **Total** | **214,367** | **234,173** | **Changes in Bonus Accruals (Thousand Brazilian Reais):** | Item | Balance at January 1, 2022 | Additions | Additions from Business Combinations | Payments | Effect of Exchange Rate Changes | Balance at June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Bonuses | 72,810 | 36,014 | 675 | (71,407) | (3,276) | 34,816 | [Accounts Payable for Business Combination](index=44&type=section&id=2.2.14.%20Accounts%20Payable%20for%20Business%20Combination) This section provides a breakdown of accounts payable for business combinations, including acquisition costs, holdback amounts, and earn-out payments, along with their changes over the period **Accounts Payable for Business Combination (Thousand Brazilian Reais):** | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Dextra Acquisition Cost | 51,961 | 48,817 | | Dextra Holdback Amount | 32,157 | 30,000 | | Somo Earn-out Payment | 56,066 | - | | Somo Escrow Account | 20,392 | - | | Box 1824 Holdback Amount | 8,871 | - | | **Total** | **181,186** | **85,726** | | Current | 113,559 | 48,923 | | Non-Current | 67,627 | 36,803 | **Changes in Accounts Payable for Business Combination (Thousand Brazilian Reais):** | Item | Balance at January 1, 2022 | Monetary Adjustment | Price Adjustment | 2022 Acquisitions | Exchange Rate Changes | FVA | Payments | Balance at June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Accounts Payable for Business Combination | 85,726 | 4,612 | 1,997 | 102,445 | (11,032) | 3,126 | (5,688) | 181,186 | [Provisions](index=45&type=section&id=2.2.15.%20Provisions) This section details the changes in provisions, including tax and labor-related provisions, and identifies the main types of labor lawsuits and judicial deposits **Changes in Provisions (Thousand Brazilian Reais):** | Item | Balance at January 1, 2021 | Provision | Balance at December 31, 2021 | Provision | Provision from Business Combination | Reversal | Expenses | Payments | Balance at June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Tax | 11 | 120 | 131 | 76 | - | (3) | - | - | 204 | | Labor | 150 | 352 | 502 | 582 | 13,583 | (270) | (11) | (4) | 14,382 | | **Total Provisions** | **161** | **472** | **633** | **658** | **13,583** | **(273)** | **(11)** | **(4)** | **14,586** | - Major labor lawsuits involve compliance with minimum quotas for disabled employees and insufficient control over working hours[172](index=172&type=chunk) - As of June 30, 2022, the Group's total judicial deposits amounted to **R$9.337 million**, with **R$9.191 million** related to tax lawsuits[173](index=173&type=chunk) [Employee Benefits](index=45&type=section&id=2.2.16.%20Employee%20Benefits) This section describes the employee benefits provided by the company, including health, dental, life insurance, and private pension plans, noting the absence of additional post-employment obligations - The Group provides employees with benefits such as medical, dental, and life insurance, and offers private pension plan options, with the company matching employee contributions in certain regions (e.g., US, UK, Canada)[177](index=177&type=chunk)[178](index=178&type=chunk) - The Group has no additional post-employment obligations or other long-term benefits[179](index=179&type=chunk) [Stock Option Plan and Share Based Compensation](index=46&type=section&id=2.2.17.%20Stock%20Option%20Plan%20and%20Share%20Based%20Compensation) This section details the company's equity-settled and cash-settled share-based compensation plans, including the number of options, exercise prices, and the expenses recognized in the profit or loss statement - The Group operates both equity-settled and cash-settled share-based compensation plans, granting stock purchase rights to executives, employees, and suppliers[182](index=182&type=chunk)[196](index=196&type=chunk) **Equity-Settled Plans (2020/2021):** | Item | 1st & 2nd Program | 3rd Program | 4th Program | | :--- | :--- | :--- | :--- | | Grant Date | 2020/04/01 | 2021/04/01 | 2021/04/01 | | Vesting Period | 6.8 years | 5.8 years | 5.8 years | | Number of Unexercised Options at June 30, 2022 | 3,155,587 | 629,546 | 156,299 | | Number of Exercisable Options at June 30, 2022 | 1,902,444 | - | - | | Exercise Price (Reais) | 9.58 | 19.84 | 19.84 | | Option Value (Reais) | 0.48 | 1.81 | 1.85 | **Equity-Settled Plans (2022):** | Item | 2022 Plan - Equity-Settled | | :--- | :--- | | Grant Date | 2022/04/01 | | Vesting Period | 6.8 years | | Number of Unexercised Options at June 30, 2022 | 290,099 | | Exercise Price (US Dollars) | 16.95 | | Option Value (US Dollars) | 3.37 | **Expenses Recognized in Profit or Loss (Thousand Brazilian Reais):** | Item | June 30, 2022 | June 30, 2021 | | :--- | :--- | :--- | | Equity-Settled Plans | 610 | 176 | | Cash-Settled Plans | 459 | 114 | | Shares Granted to Executives | 64 | 211 | | **Total Expenses Recognized in Profit or Loss** | **1,133** | **501** | [Equity](index=50&type=section&id=2.2.18.%20Equity) This section details the components of equity, including share capital, share premium, capital reserves, retained earnings, and other comprehensive income, along with the voting rights of different share classes **Share Capital (Thousand Brazilian Reais):** | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Number of Common Shares | 133,178,767 | 132,197,896 | | Par Value | 0.00027 | 0.00027 | | **Total Share Capital** | **37** | **36** | - Class A and Class B common shares have equal rights, but Class B common shares carry **10 votes per share**, while Class A common shares carry **1 vote per share**[209](index=209&type=chunk) - Share premium amounts to **R$915.947 million (US$166.666 million)**, and capital reserves include equity payments related to corporate reorganization, share-based compensation, and the Box 1824 business combination[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) **Retained Earnings (Thousand Brazilian Reais):** | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Retained Earnings Reserve | 125,957 | 125,957 | | Retained Earnings – Net Profit for the Period | 55,222 | - | | **Total Retained Earnings** | **181,179** | **125,957** | - Other comprehensive income includes cumulative exchange adjustments for foreign currency investments and cash flow hedges[215](index=215&type=chunk)[216](index=216&type=chunk) [Net Revenue](index=52&type=section&id=2.2.19.%20Net%20Revenue) This section provides a detailed breakdown of net revenue by service type and industry vertical, explaining the revenue recognition policy and presenting contract assets **Net Revenue by Nature of Services (Thousand Brazilian Reais):** | Service Type | 6M22 | 2Q22 | 6M21 | 2Q21 | | :--- | :--- | :--- | :--- | :--- | | Software Development Revenue | 975,793 | 505,132 | 588,118 | 303,677 | | Software Maintenance Revenue | 26,957 | 13,577 | 13,527 | 6,890 | | Consulting Revenue | 10,198 | 5,025 | 7,717 | 3,669 | | Software License Resale Revenue | 525 | 275 | 1,029 | 487 | | Other Revenue | 3,414 | 1,006 | 1,225 | 601 | | **Total Net Revenue** | **1,016,887** | **525,015** | **611,616** | **315,324** | **Net Revenue by Industry Vertical (Thousand Brazilian Reais):** | Industry | 6M22 | 2Q22 | 6M21 | 2Q21 | | :--- | :--- | :--- | :--- | :--- | | Financial Services | 315,064 | 161,466 | 210,089 | 111,268 | | Food and Beverage | 202,056 | 107,988 | 172,169 | 88,112 | | Technology, Media and Telecommunications | 137,443 | 69,690 | 62,491 | 30,142 | | Pharma and Cosmetics | 133,990 | 70,568 | 87,604 | 45,798 | | Retail and Manufacturing | 67,053 | 31,624 | 34,210 | 18,232 | | Education and Services | 36,653 | 16,965 | 23,638 | 11,446 | | Logistics and Transportation | 34,632 | 17,596 | 10,155 | 4,923 | | Other | 89,996 | 49,118 | 11,260 | 5,403 | | **Total Net Revenue** | **1,016,887** | **525,015** | **611,616** | **315,324** | - Revenue is measured based on the consideration specified in contracts with customers and recognized when control is transferred to the customer; service revenue (software development, maintenance, consulting) is recognized over time, measured by progress based on hours incurred[219](index=219&type=chunk) **Contract Assets (Thousand Brazilian Reais):** | Market | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Local Market | 127,797 | 80,107 | | Overseas Market | 105,276 | 55,194 | | Less: Expected Credit Losses | (1,378) | (913) | | **Total** | **231,695** | **134,388** | [Expenses by Nature](index=53&type=section&id=2.2.20.%20Expenses%20by%20Nature) This section provides a detailed breakdown of expenses by nature, including employee costs, third-party services, depreciation, amortization, and acquisition-related expenses **Expenses by Nature (Thousand Brazilian Reais):** | Expense Type | 6M22 | 2Q22 | 6M21 | 2Q21 | | :--- | :--- | :--- | :--- | :--- | | Employee Expenses | (746,236) | (380,666) | (422,324) | (222,351) | | Third-Party Services and Other Inputs | (51,323) | (27,259) | (28,892) | (13,183) | | Depreciation and Amortization | (43,596) | (24,205) | (16,019) | (8,224) | | Insurance | (7,687) | (3,579) | (472) | (224) | | Short-Term Leases | (3,335) | (1,617) | (3,426) | (1,628) | | Travel Expenses | (5,119) | (3,742) | (569) | (318) | | Training | (2,929) | (1,652) | (1,811) | (1,022) | | Share-based Compensation | (1,133) | 106 | (501) | (328) | | Expected Credit Losses | (710) | 356 | (367) | 2,890 | | Consulting Fees | (9,090) | (6,395) | (462) | (237) | | Other Post-Acquisition Expenses | (8,464) | (8,464) | - | - | | Other Costs and Expenses | (14,468) | (6,350) | (10,092) | (5,565) | | **Total** | **(894,090)** | **(463,467)** | **(484,935)** | **(250,190)** | - Depreciation and amortization include **R$19.614 million** in cost of services and **R$19.024 million** in intangible asset amortization expenses[223](index=223&type=chunk) - Consulting fees totaled **R$9.09 million**, primarily related to acquisitions, while other post-acquisition expenses include fair value adjustments to accounts payable for business combinations (**R$5.123 million**) and other business combination obligations (**R$3.341 million**)[223](index=223&type=chunk) [Net Finance Costs](index=54&type=section&id=2.2.21.%20Net%20Finance%20Costs) This section details the components of net finance costs, including financial income and costs, and explains the primary drivers behind changes in foreign exchange and interest expenses **Net Finance Costs (Thousand Brazilian Reais):** | Item | 6M22 | 2Q22 | 6M21 | 2Q21 | | :--- | :--- | :--- | :--- | :--- | | **Financial Income:** | | | | | | Financial Investment Income | 3,555 | 2,170 | 724 | 306 | | Foreign Exchange Gains | 107,358 | 45,323 | 11,999 | 3,716 | | Gains on Derivatives | 10,865 | 5,063 | 12,228 | 11,953 | | **Financial Costs:** | | | | | | Foreign Exchange Losses | (92,709) | (32,019) | (17,495) | (15,921) | | Losses on Derivatives | (10,670) | (9,865) | (7,571) | (505) | | Interest and Charges on Loans and Leases | (37,055) | (18,918) | (3,672) | (1,738) | | **Net Financial Result** | **(34,245)** | **(17,533)** | **(3,686)** | **(1,989)** | - Foreign exchange gains primarily arise from the translation of foreign currency assets and liabilities, as well as transactions and financial operations, while foreign exchange losses mainly result from the translation of transactions and financial operations and changes in functional currency[224](index=224&type=chunk) - The main change in interest and charges on loans and leases is related to the Dextra acquisition loan, amounting to **R$32.145 million**[224](index=224&type=chunk) [Income Tax and Social Contribution](index=54&type=section&id=2.2.22.%20Income%20Tax%20and%20Social%20Contribution) This section explains how income tax expense is determined and states the consolidated effective tax rates for the reported periods - Income tax expense is determined based on management's best estimate of the weighted average annual income tax rate, adjusted for the tax effects of certain items fully recognized in the interim period[225](index=225&type=chunk) - For the six-month period ended June 30, 2022, the Group's consolidated effective tax rate from continuing operations was **38%**, compared to **37%** for the same period in 2021[226](index=226&type=chunk) [Earnings Per Share](index=55&type=section&id=2.2.23.%20Earnings%20Per%20Share) This section presents the basic and diluted earnings per share, along with the weighted average number of shares used in their calculation **Earnings Per Share (Thousand Brazilian Reais):** | Metric | 6M22 | 2Q22 | 6M21 | 2Q21 | | :--- | :--- | :--- | :--- | :--- | | Profit Attributable to Holders of Common Shares | 55,222 | 25,999 | 84,337 | 44,722 | | Weighted Average Number of Shares for Basic EPS | 132,841,306 | 133,040,816 | 119,960,383 | 119,960,383 | | **Basic Earnings Per Share (R$)** | **0.42** | **0.20** | **0.70** | **0.37** | | Weighted Average Number of Shares for Diluted EPS | 132,841,306 | 133,040,816 | 122,153,579 | 119,960,383 | | **Diluted Earnings Per Share (R$)** | **0.42** | **0.20** | **0.69** | **0.37** | [Financial Instruments and Risk Management](index=55&type=section&id=2.2.24.%20Financial%20Instruments%20and%20Risk%20Management) This section describes the company's use of financial instruments, fair value estimation methods, and strategies for managing market, credit, and liquidity risks - The Group operates with derivative and non-derivative financial instruments, monitoring consistency between contractual terms and current market terms, and does not engage in speculative derivative investments[231](index=231&type=chunk) - Fair value estimates for financial instruments use market data and specific valuation methods, including discounted cash flow models and the Black-Scholes model[234](index=234&type=chunk) **Carrying Amounts and Fair Values of Financial Assets and Liabilities (Thousand Brazilian Reais) - June 30, 2022:** | Item | Amortized Cost | Measured at FVTPL | Measured at FVOCI | Total | | :--- | :--- | :--- | :--- | :--- | | **Financial Assets:** | | | | | | Cash and Cash Equivalents | 104,190 | - | - | 104,190 | | Financial Investments | 253,304 | - | - | 253,304 | | Trade Receivables | 416,728 | - | - | 416,728 | | Contract Assets | 231,695 | - | - | 231,695 | | Derivatives | - | 7,736 | - | 7,736 | | **Financial Liabilities:** | | | | | | Suppliers and Other Payables | 24,655 | - | - | 24,655 | | Loans and Borrowings | 673,242 | - | - | 673,242 | | Lease Liabilities | 83,236 | - | - | 83,236 | | Accounts Payable for Business Combination | 181,186 | - | - | 181,186 | | Derivatives | - | 7,033 | - | 7,033 | - The Group faces market risks (inflation, interest rates, exchange rates), credit risk, and liquidity risk, which are managed through hedge accounting, natural hedging, and credit line management[238](index=238&type=chunk)[240](index=240&type=chunk)[268](index=268&type=chunk)[273](index=273&type=chunk) [Related Parties](index=67&type=section&id=2.2.25.%20Related%20Parties) This section discloses transactions and compensation with related parties, specifically key management personnel - As of June 30, 2022, the Group paid **R$6.788 million** in direct compensation to key management personnel, with **R$10 thousand** in share-based compensation expenses recognized in the profit or loss statement[290](index=290&type=chunk)[291](index=291&type=chunk) - The Group has no additional post-employment obligations or other long-term benefits for senior management members[292](index=292&type=chunk) [Operating Segments](index=67&type=section&id=2.2.26.%20Operating%20Segments) This section identifies the Group's single operating and reportable segment, provides revenue breakdown by geography, and details non-current assets by geographical location - The Group's Chief Operating Decision Maker (CODM) is the Board of Directors, which views the entire Group as a single operating and reportable segment, monitoring operations, allocating resources, and assessing performance on this basis[293](index=293&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk) **Net Revenue by Geography (Thousand Brazilian Reais):** | Geography | 6M22 | 2Q22 | 6M21 | 2Q21 | | :--- | :--- | :--- | :--- | :--- | | North America and Europe (NAE) | 508,993 | 267,464 | 312,810 | 159,187 | | Latin America (LATAM) | 477,280 | 242,574 | 277,818 | 146,641 | | Asia, Pacific and Japan (APJ) | 30,614 | 14,977 | 20,988 | 9,496 | | **Total** | **1,016,887** | **525,015** | **611,616** | **315,324** | - Net revenue from a single client accounted for **16% of the company's total net revenue** (compared to 24% as of June 30, 2021)[296](index=296&type=chunk) **Non-Current Assets Geographical Information (Thousand Brazilian Reais):** | Geography | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Brazil | 863,778 | 837,865 | | United States | 391,766 | 38,417 | | Japan | 441 | 176 | | China | 1,653 | 2,239 | | Canada | 356 | 284 | | Portugal | 494 | 387 | | Other Countries | 5,508 | 82 | | **Total** | **1,263,996** | **879,450** | [Subsequent Events](index=68&type=section&id=2.2.27.%20Subsequent%20Events) This section reports significant events that occurred after the reporting period, including the establishment of a new subsidiary and a planned acquisition - On July 11, 2022, the company established a new indirect operating subsidiary, CI&T Colombia S.A.S[298](index=298&type=chunk) - On August 16, 2022, the company announced the signing of an agreement to acquire Transpire Technology Pty Ltd, an Australian technology consulting firm, to enhance growth in the Asia-Pacific region, with the transaction expected to close in the third quarter of 2022[299](index=299&type=chunk) [Signatures](index=69&type=section&id=SIGNATURES) This section contains the formal signatures for the financial report [Signature of Chief Financial Officer](index=69&type=section&id=3.1.%20Signature%20of%20Chief%20Financial%20Officer) This report has been formally signed by CI&T Inc.'s Chief Financial Officer, Stanley Rodrigues, on August 17, 2022, confirming compliance with the Securities Exchange Act of 1934 - CI&T Inc.'s Chief Financial Officer, Stanley Rodrigues, signed this report on August 17, 2022[303](index=303&type=chunk)

CI&T, Inc. (NYSE:CINT) Q1 2022 Earnings Conference Call May 19, 2022 8:00 AM ET Company Participants Eduardo Galvao - Head of Investor Relations Cesar Gon - Chief Executive Officer Stanley Rodrigues - Chief Financial Officer Bruno Guicardi - Director of Operations Conference Call Participants Ashwin Shirvaikar - Citibank Puneet Jain - JPMorgan Arturo Langa - Itau Jason Kupferberg - Bank of America Eduardo Galvao Good morning, everyone. Welcome to CI&T First Quarter 2022 Results Conference Call. I am Eduardo ...

[PART I](index=5&type=section&id=PART%20I) [Presentation of Financial and Other Information](index=5&type=section&id=PRESENTATION%20OF%20FINANCIAL%20AND%20OTHER%20INFORMATION) This section outlines the basis for the financial statements and other information presented, prepared under IFRS with Brazilian Reais (R$) as presentation currency - CI&T Inc is a Cayman Islands exempted company incorporated on June 7, 2021, which became the ultimate holding company of the group following a corporate reorganization in November 2021[13](index=13&type=chunk) - The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB, with the Brazilian real (R$) as the functional and presentation currency[12](index=12&type=chunk)[13](index=13&type=chunk) - The report presents several non-IFRS financial measures, including Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Profit, and Net Revenue at Constant Currency, which management believes provide supplemental measures of core operational performance[16](index=16&type=chunk) [Key Information](index=11&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section details significant investment risks, including client concentration, competition, talent retention, and the dual-class share structure [D. Risk factors](index=11&type=section&id=D.%20Risk%20factors) The company faces substantial risks from client concentration, intense competition, talent retention, geopolitical events, and material weaknesses in internal controls - Significant client concentration risk exists, with the top client accounting for **20% of net revenue** and the top ten clients accounting for **63% of net revenue in 2021**[53](index=53&type=chunk) - The company faces intense competition from digital transformation providers like Globant and EPAM, as well as traditional IT services companies like Accenture and Cognizant[65](index=65&type=chunk) - Material weaknesses in internal control over financial reporting have been identified, specifically related to general information technology controls (GITCs) and the review of manual journal entries[42](index=42&type=chunk)[104](index=104&type=chunk) - The dual-class share structure concentrates voting control with Class B shareholders, who hold ten votes per share compared to one vote per Class A share, limiting the influence of public shareholders on corporate matters[50](index=50&type=chunk)[136](index=136&type=chunk) - The business is subject to geopolitical risks, including potential adverse effects from the military conflict between Russia and Ukraine and the resulting economic sanctions[33](index=33&type=chunk)[57](index=57&type=chunk) [Information on the Company](index=47&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section provides a comprehensive overview of CI&T's business, history, structure, and strategic acquisitions, including its service model and market position [A. History and Development of the Company](index=47&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Founded in 1995 in Brazil, CI&T has grown into a global digital transformation specialist through strategic investments and acquisitions, including its 2021 NYSE IPO - In 2019, funds managed by Advent International made a strategic minority investment, enabling the company to accelerate its global growth strategy[151](index=151&type=chunk) - The company completed its initial public offering (IPO) on November 10, 2021, with its Class A common shares trading on the NYSE under the symbol 'CINT'[151](index=151&type=chunk) - CI&T has pursued strategic acquisitions to fuel growth, including Dextra Investimentos S.A. in Brazil (closed August 2021) and Somo Global Ltd in the EMEA region (closed January 2022)[151](index=151&type=chunk)[153](index=153&type=chunk) [B. Business Overview](index=48&type=section&id=B.%20Business%20Overview) CI&T provides end-to-end digital transformation services to large enterprises, operating with a 'Growth Unit' and 'Squads' model, demonstrating strong client retention - CI&T operates in the global digital transformation services market, which IDC forecasts will reach **US$958 billion** in annual spending by 2024[153](index=153&type=chunk) - The company's delivery model is structured around autonomous 'Growth Units' of approximately **400 people**, which are further broken down into 'Squads' of about **10 people** dedicated to specific clients or projects[153](index=153&type=chunk) - The company has demonstrated strong client relationships and expansion, with a five-year average Net Revenue Retention Rate of **120%**[155](index=155&type=chunk)[178](index=178&type=chunk) Net Revenue by Industry Vertical (2021 vs 2020) | By Industry Vertical | 2021 (in thousands of R$) | 2021 (%) | 2020 (in thousands of R$) | 2020 (%) | | :--- | :--- | :--- | :--- | :--- | | Financial Services | 487,177 | 34% | 324,118 | 34% | | Food and Beverages | 340,709 | 24% | 244,590 | 26% | | Pharmaceuticals and Cosmetics | 206,375 | 14% | 134,763 | 14% | | Technology, Media and Telecom | 169,311 | 12% | 81,961 | 9% | | Retail and Manufacturing | 93,871 | 7% | 83,046 | 9% | | Education and Services | 64,336 | 5% | 41,323 | 4% | | Others | 82,600 | 6% | 46,718 | 5% | | **Total Net revenue** | **1,444,380** | **100%** | **956,519** | **100%** | Client Concentration (2021 vs 2020) | Client Concentration | 2021 (in thousands of R$) | 2021 (%) | 2020 (in thousands of R$) | 2020 (%) | | :--- | :--- | :--- | :--- | :--- | | Top Client | 283,311 | 20% | 190,599 | 20% | | Top Ten Clients | 913,890 | 63% | 644,722 | 67% | | **Total Net revenue** | **1,444,380** | | **956,519** | | [C. Organizational Structure](index=60&type=section&id=C.%20Organizational%20Structure) CI&T Inc., a Cayman Islands holding company, became the indirect parent of CI&T Brazil through a U.S. subsidiary following a corporate reorganization prior to its 2021 IPO - The current corporate structure was established through a series of contributions prior to the IPO, resulting in CI&T Inc. (Cayman Islands) holding CI&T Delaware LLC (USA), which in turn holds CI&T Brazil[199](index=199&type=chunk) [Operating and Financial Review and Prospects](index=62&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes CI&T's financial performance, highlighting 2021 revenue growth driven by client expansion and acquisitions, alongside a slight net profit decrease due to increased expenses [A. Operating Results.](index=62&type=section&id=A.%20Operating%20Results.) In 2021, net revenue grew **51%** to **R$1.44 billion**, but net profit decreased **1%** to **R$126.0 million** due to higher operating expenses and acquisition-related costs Consolidated Results of Operations (2021 vs. 2020) | Metric | 2021 (in thousands of R$) | 2020 (in thousands of R$) | Change (%) | | :--- | :--- | :--- | :--- | | Net revenue | 1,444,380 | 956,519 | 51% | | Gross Profit | 508,648 | 355,653 | 43% | | Operating profit | 244,606 | 208,244 | 17% | | Net profit for the year | 125,957 | 127,654 | (1)% | - Net revenue growth in 2021 was driven by a **128% Net Revenue Retention rate**, the addition of **36 new clients** with over **R$1.0 million** in revenue, and a **R$107 million** contribution from the Dextra acquisition[215](index=215&type=chunk) - Operating expenses increased by **79%** in 2021, mainly due to higher employee expenses from new hires, M&A consulting fees, and a **R$21.9 million** impairment charge on intangible assets related to the Dextra acquisition[223](index=223&type=chunk)[224](index=224&type=chunk)[227](index=227&type=chunk) Non-IFRS Financial Measures (2021 vs. 2020) | Metric | 2021 (in thousands of R$) | 2020 (in thousands of R$) | | :--- | :--- | :--- | | Adjusted Gross Profit | 542,463 | 379,877 | | Adjusted Gross Profit Margin | 37.6% | 39.7% | | Adjusted EBITDA | 324,081 | 237,917 | | Adjusted EBITDA Margin | 22.4% | 24.9% | | Adjusted Net Profit | 157,029 | 128,082 | | Adjusted Net Profit Margin | 10.9% | 13.4% | [B. Liquidity and Capital Resources](index=76&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) As of December 31, 2021, the company maintained strong liquidity with **R$934.5 million** in cash and investments, despite significant cash usage for acquisitions and debt financing Cash and Financial Investments (as of Dec 31, 2021) | Item | Amount (in thousands of R$) | | :--- | :--- | | Cash and cash equivalents | 135,727 | | Financial investments | 798,786 | | **Total** | **934,513** | Consolidated Cash Flow Summary (FY 2021) | Cash Flow Activity | Amount (in thousands of R$) | | :--- | :--- | | Net cash from operating activities | 132,379 | | Net cash used in investing activities | (1,507,544) | | Net cash from financing activities | 1,376,766 | - Total outstanding consolidated indebtedness was **R$788.7 million** as of December 31, 2021, an increase of **R$699.5 million** from 2020, mainly to finance the Dextra acquisition[273](index=273&type=chunk) - Capital expenditures in 2021 were **R$29.9 million**, primarily for IT equipment and software investments to support company growth[276](index=276&type=chunk) [E. Critical Accounting Policies and Estimates](index=79&type=section&id=E.%20Critical%20Accounting%20Policies%20and%20Estimates) The company's critical accounting policies involve significant judgment in lease term determination, revenue recognition, and fair value measurement in business combinations - Significant judgments are made in determining lease terms, specifically whether the company is reasonably certain to exercise extension options[280](index=280&type=chunk) - A key area of estimation uncertainty is the measurement of fair value for assets acquired and liabilities assumed in business combinations, as demonstrated in the Dextra acquisition[281](index=281&type=chunk) [Directors, Senior Management and Employees](index=81&type=section&id=ITEM%206.%20Directors%2C%20Senior%20Management%20and%20Employees) This section details the company's seven-member board, executive compensation, and significant employee growth to **5,564** in 2021, with a **15.6%** voluntary attrition rate - The Board of Directors is composed of seven members, including three independent directors: Silvio Romero de Lemos Meira, Maria Helena dos Santos Fernandes de Santana, and Eduardo Campozana Gouveia[286](index=286&type=chunk) - Aggregate compensation for the board of directors and executive officers for the year ended December 31, 2021, was **R$11.1 million**[294](index=294&type=chunk) Employee Headcount by Geography | Region | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | North America & Europe | 210 | 145 | 110 | | Latin America (Brazil) | 5,139 | 2,910 | 2,090 | | Asia Pacific and Japan | 215 | 164 | 150 | | **Total** | **5,564** | **3,219** | **2,350** | - The company's voluntary employee attrition rate for the period 2020 through 2021 was **15.6%** (excluding employees with less than six months of tenure)[303](index=303&type=chunk) [Major Shareholders and Related Party Transactions](index=87&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section outlines CI&T's dual-class share structure, concentrating **92.9%** of voting power with founders and Advent, and details the Shareholders' Agreement Major Shareholders and Voting Power | Shareholder | Class B Shares | % of Class B | % of Total Voting Power | | :--- | :--- | :--- | :--- | | Cesar Nivaldo Gon (Founder) | 23,303,273 | 19.9% | 19.6% | | Fernando Matt Borges Martins (Founder) | 22,722,913 | 19.4% | 19.1% | | Bruno Guiçardi Neto (Founder) | 15,298,381 | 13.0% | 12.9% | | Advent Managed Fund LLCs | 49,081,192 | 41.9% | 41.3% | - Due to the dual-class structure (10 votes per Class B share), the holders of Class B common shares (Founders and Advent) collectively control approximately **92.9%** of the total voting power[305](index=305&type=chunk)[314](index=314&type=chunk) - A Shareholders' Agreement is in place, granting the Founders the right to appoint a majority of the board of directors and giving Advent the right to appoint directors based on its voting power percentage[316](index=316&type=chunk) [Financial Information](index=90&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section confirms the inclusion of consolidated financial statements, notes no material legal proceedings, and states the company's policy of retaining earnings for growth instead of paying dividends - The company is not presently a party to any legal proceedings that would have a material adverse effect on its business[322](index=322&type=chunk) - CI&T has not adopted a dividend policy and does not anticipate paying cash dividends in the foreseeable future, intending to retain earnings for business development and expansion[323](index=323&type=chunk) - The company's Brazilian subsidiary is required by local law to distribute a mandatory minimum dividend of at least **25%** of its adjusted net income for the prior year[325](index=325&type=chunk) [Additional Information](index=92&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION.) This section details CI&T's corporate governance, dual-class share structure with Class B shares having ten votes and preemptive rights, and anti-takeover provisions - The company has a dual-class share structure: Class A common shares with one vote per share and Class B common shares with ten votes per share[334](index=334&type=chunk)[340](index=340&type=chunk) - Each Class B common share is convertible into one Class A common share at the holder's option or automatically upon most transfers, and all Class B shares will automatically convert if their total number falls below **10%** of total outstanding shares[344](index=344&type=chunk) - Holders of Class B shares have preemptive rights to purchase additional Class B shares in new issuances to maintain their proportional ownership, subject to the consent of a majority of Class B shareholders[343](index=343&type=chunk) - The Articles of Association include anti-takeover provisions, such as the dual-class voting structure and the board's authority to issue preferred shares with special rights without shareholder approval[371](index=371&type=chunk)[374](index=374&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=111&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exposed to credit, interest rate, and significant foreign currency exchange rate risks, which are partially hedged using derivative financial instruments - The company's primary market risk is foreign currency exchange rate risk, as most revenue is in foreign currency (mainly USD) while most expenses are in Brazilian Reais (BRL)[416](index=416&type=chunk) - As of December 31, 2021, the company's net exposure to USD was **R$725.4 million**[416](index=416&type=chunk)[770](index=770&type=chunk) Sensitivity Analysis for Interest Rate Risk (Effect on Earnings) | Scenario | Probable | Adverse | Remote | | :--- | :--- | :--- | :--- | | **Effect on earnings (reduction in R$ thousands)** | **(8,367)** | **(12,763)** | **(17,160)** | Sensitivity Analysis for Exchange Rate Risk (Effect on Earnings) | Scenario | Probable (USD/BRL 5.30) | Adverse (USD/BRL 5.50) | Remote (USD/BRL 5.70) | | :--- | :--- | :--- | :--- | | **Effect on earnings (increase/(decrease) in R$ thousands)** | **303** | **88** | **(357)** | [PART II](index=116&type=section&id=PART%20II) [Controls and Procedures](index=118&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls were ineffective as of December 31, 2021, due to material weaknesses in IT and manual journal entry controls, with a remediation plan underway - Management concluded that disclosure controls and procedures were ineffective as of December 31, 2021, due to material weaknesses in internal control over financial reporting[439](index=439&type=chunk) - Two material weaknesses were identified: 1) Ineffective design and implementation of general information technology controls (GITCs) related to user access, and 2) Ineffective design and implementation of formal controls for the review of manual journal entries[441](index=441&type=chunk) - A remediation plan is underway, involving the implementation of new access management processes, a privileged access management (PAM) tool, and automated preventive controls for journal entries within the ERP system, which were implemented in February 2022 and will be monitored for effectiveness[441](index=441&type=chunk) [PART III](index=123&type=section&id=PART%20III) [Financial Statements](index=124&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section presents CI&T's audited consolidated financial statements for the three years ended December 31, 2021, prepared under IFRS, including notes on corporate restructuring and acquisitions Consolidated Statement of Financial Position (Abridged) | (in thousands of R$) | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **2,362,344** | **585,082** | | Total Current Assets | 1,450,905 | 434,552 | | Total Non-Current Assets | 911,439 | 150,530 | | **Total Liabilities and Equity** | **2,362,344** | **585,082** | | Total Current Liabilities | 548,973 | 310,992 | | Total Non-Current Liabilities | 724,076 | 75,630 | | **Total Equity** | **1,089,295** | **198,460** | Consolidated Statement of Profit or Loss (Abridged) | (in thousands of R$) | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | :--- | | Net revenue | 1,444,380 | 956,519 | 677,133 | | Gross profit | 508,648 | 355,653 | 228,154 | | Operating profit | 244,606 | 208,244 | 91,699 | | **Net profit for the year** | **125,957** | **127,654** | **56,569** | - The acquisition of Dextra Group on August 10, 2021, involved a total consideration of **R$783.6 million** and resulted in the recognition of **R$595.7 million** in goodwill[635](index=635&type=chunk)[650](index=650&type=chunk) - Subsequent to year-end, on January 27, 2022, the company completed the acquisition of Somo Global Ltd for **R$341 million** in cash and **225,649 Class A common shares**, plus a potential earn-out[815](index=815&type=chunk)