CI&T Inc(US:CINT)2023-05-19 15:27Financial Data and Key Metrics Changes - The company's net revenue for Q1 2023 was BRL610 million, representing a 24.3% increase at constant currency year-over-year [6][28] - Adjusted EBITDA margin improved to 19.1%, up 1.9 percentage points compared to Q1 2022 [6][16] - Adjusted net profit reached BRL67 million, a 70% increase from Q1 2022, with an adjusted net profit margin of 11% [6][31] - Cash generated from operating activities was BRL116 million, indicating a 100% cash conversion to adjusted EBITDA [55] Business Line Data and Key Metrics Changes - The company added 70 new clients with annual revenue exceeding BRL1 million, increasing the total to 180 clients [6][15] - The number of clients with revenue above BRL20 million rose from 22 to 26 [15] - The attrition rate decreased to 12% from 16% in Q1 2022, with leadership attrition below 4% [24] Market Data and Key Metrics Changes - North America accounted for 46% of revenue, Europe contributed 9%, and Asia Pacific 5%, totaling over 60% from mature economies [14] - LATAM represented 39% of revenue, highlighting exposure to emerging markets [14] Company Strategy and Development Direction - The company is focused on maximizing growth opportunities in the U.S. market following the acquisition of NTERSOL, particularly in the financial services sector [11] - Brazil remains a key market due to its significant tech potential and progressive consumer base [12] - The company aims to enhance its capabilities in artificial intelligence and digital efficiency to drive future growth [22][54] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macroeconomic environment, noting that while clients are maintaining digital budgets, there is a cautious approach to new initiatives [56] - The company expects revenue for Q2 2023 to be at least BRL570 million, projecting a year-over-year growth of 90% [34] - For the full year, the company maintains a net revenue growth guidance of 13% to 17% and an adjusted EBITDA margin expectation of at least 19% [34] Other Important Information - The Board of Directors approved a share buyback program for up to BRL1.5 million of Class A shares over the next 12 months [17] - The company is committed to maintaining a lean organizational structure while investing in AI initiatives [54] Q&A Session Summary Question: Demand assumptions for 2023 guidance - Management indicated that the guidance reflects a cautious outlook due to macroeconomic uncertainties, with expectations for a stable demand environment [42] Question: Profitability amid labor cost increases - The improvement in EBITDA margin was attributed to the dilution of SG&A expenses as the company grows, while closely monitoring costs [44][45] Question: Cash generation expectations for the remainder of the year - The company expects cash conversion from EBITDA to be around 50% to 70% for the full year, with Q1 showing 100% conversion [81][100] Question: Impact of AI on margins and internal processes - Management emphasized the commitment to applying AI for internal efficiency while also investing in AI capabilities for future growth [92][93]