CI&T Q2 2025 Earnings Call Transcript

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Provided by Quartr
August 13, 2025

Key Takeaways

  • Positive Sentiment: In Q2, CINT reported $117.2 million in revenue (12.3% organic growth at constant currency), with an adjusted EBITDA margin of 18.4% and an adjusted profit margin of 10.4%, enabling continued investment in AI-first offerings.
  • Positive Sentiment: The CINT Flow AI platform is now used by 90% of the teams and influences approximately 90% of revenue, delivering over 50% efficiency gains and strengthening partnerships with major clients.
  • Positive Sentiment: Revenue in Latin America grew 26% YoY and North America 7%, while the sales pipeline is up 25% from last year, leading CINT to raise its full-year revenue guidance to 10.5–15% organic growth and maintain an 18–20% EBITDA margin target.
  • Negative Sentiment: Adjusted net income in Q2 decreased to $12.2 million from $12.5 million in the prior year period, reflecting margin pressure from strategic hiring and foreign-exchange assumptions.
  • Positive Sentiment: CINT was selected as one of just 15 global members of the AWS GenAI Partner Innovation Alliance and showcased AI-driven transformation projects with clients like Ford, Natura and Project Nemo.
AI Generated. May Contain Errors.
Earnings Conference Call
CI&T Q2 2025
00:00 / 00:00

There are 16 speakers on the call.

Operator

Welcome to CINT earnings call for the 2025. I am Eduardo Galvan, Director of Investor Relations at CINT. Presenting our results with me today are Cesar Gon, our Founder and CEO Bruno Guicaggi, Founder and President for North America and Europe and Stanley Rodriguez, our CFO. This event is being recorded and all participants will be in a listen only mode during the company's presentation. After that, there will be a Q and A session.

Operator

If you'd like to submit a question, please send it via e mail to investors@cint.com. The presentation is available on the company's Investor Relations website, and the replay will be available shortly after the event is concluded. Some of the matters we'll discuss on this call, including our expected business outlook, are forward looking statements. They are subject to known and unknown risks and uncertainties, which could cause actual results to differ from those expressed on this call. We caution you not to place undue reliance on these forward looking statements as they're valid only as of the date when made.

Operator

During this presentation, we'll comment on certain non IFRS financial measures to evaluate our business. Please refer to the reconciliation tables of non IFRS measures in the earnings release for more details. At this time, I'll pass it on to Cesar Gon to begin our presentation.

Speaker 1

Thank you, Galvan, and good afternoon, everyone. Today, companies demand more than innovation. They want measurable business impact. AI may be overhyped to some, underhyped to others. But one thing is clear.

Speaker 1

Technology investments must deliver strategic returns. That's where CINT stands out. We adapt constantly to meet our clients' needs, powered by two engines, our expert teams and our specialized AI platform, CI and T Flow. Together, they orchestrate mission critical projects in real time, delivering fast execution, higher quality, and a strong return on investment. We call this tech integrated business solutions, seamlessly combining business transformation with technology and AI.

Speaker 1

It gives leaders the clarity and predictability they need and it is deepening our partnership, especially with our largest clients. We believe the future belongs to companies that unite business and technology into one integrated strategy. The strength of this approach is reflected in our results, which I am pleased to share with you now. Now let's review our second quarter twenty twenty five financial highlights. Our strategy of embedding deeply with large clients and delivering clear value has allowed us to maintain our momentum and deliver strong performance.

Speaker 1

Our revenue reached $117,200,000 which represents an organic growth of 12.3% at constant currency compared to the same period last year. On the profitability front, our adjusted EBITDA margin was 18.4. As expected, this represents a sequential improvement from the first quarter, underscoring our commitment to operational excellence and disciplined cost management. Furthermore, our adjusted profit margin stood at a healthy 10.4%. This solid financial foundation allowed us to continue investing in the key pillars of our growth, particularly in our AI first offerings, which are reshaping what's possible for our clients.

Speaker 2

Your cars are smart. Your processes still stuck in first gear. CI and T Flow hits the gas. From design to delivery, we automate the digital journey. Marketing, sales, after sales, all accelerated, built to move at the speed of your ambition.

Speaker 2

It feels like magic, but really, it's just damn good math. Now take a look at what we are building with CINT Flow.

Speaker 3

For three years, Ford has trusted us to accelerate its digital transformation across South America. From modernizing platforms, expanding capabilities, and delivering with Gen AI strategies, including an early rollout of the parts warehouse platform in Argentina and the migration of more than 75 applications to Google Cloud. With intelligence under the hood and AI driving efficiency, we are moving faster and smarter.

Speaker 4

Bibi Seguros changing customer experience with VR gamification. In partnership with us and Eagle Agency, Bibi Seguros launched Play Not Motessao, a virtual reality game that makes insurance an immersive, intuitive experience. Built with accessibility in mind, the experience is available on VR headsets and smartphones, making learning about insurance in real life simple, engaging, and memorable. In a world of daily potential risks, playing it smart is the best kind of insurance.

Speaker 5

Natura is enhancing digital access by using AI to create more inclusive experiences for people with disabilities. The project improves accessibility for 1,800,000 Natura and Avon consultants by collecting feedback and adapting interfaces to different navigation needs. Over 60 professionals worked with CI and T Flow to identify and resolve invisible barriers in real time. Natura and CINT, creating digital experiences that care.

Speaker 6

As payments go digital, one point two billion people with disabilities risk being left behind. Eighty seven percent of those with learning disabilities rely on unsafe workarounds, like linker sharing pins, just to pay. The system just isn't built for them. That's why we partnered with Project Nemo, a not for profit focused on financial inclusion to create a solution.

Speaker 1

Brilliant. Quite frankly.

Speaker 6

Yeah. I love it.

Speaker 7

I love this.

Speaker 6

In six weeks, we designed Nemo, an art of the possible app prototype that helps adults with learning disabilities manage their finances independently with trusted support when needed. That should be everywhere. That's general population, isn't it, Juan?

Speaker 7

Accessibility is not a disabled word. Everybody Yeah. Doesn't want things done simply.

Speaker 6

With CINT and Project Nemo, inclusive banking is here. And it's just the beginning.

Speaker 4

We are proud to announce that we've joined AWS's GenAI Partner Innovation Alliance, becoming one of just 15 partners worldwide and only the second in Latin America to be selected. With a shared commitment to driving impact through generative AI, this exclusive alliance brings us closer to AWS's most advanced GenAI leaders, tools, and opportunities. The journey continues now with even more intelligence behind it.

Speaker 2

Sitting on a fortress of financial data, but speed nowhere to be found. That's why there's CI and T Flow. We streamline insights and unlock real time decisions. AI to modernize your banking applications faster. No more waiting on yesterday's numbers.

Speaker 2

It feels like magic, but, really, it's just damn good math. Now take a look at what we are building with CINT Flow.

Speaker 4

We took center stage at Febrebond Tech twenty twenty five, Brazil's largest financial technology event, leading eight panels. We brought together leaders from banks and tech to the stage and also launched a consumer trends study developed in partnership with DOCS eighteen twenty four, exploring how new behaviors are reshaping the financial sector. At our booth, built with AWS, Intel, and Databricks, visitors experienced hands on how AI is transforming financial services. Let's keep navigating the future of smart finance.

Speaker 1

These are just a few examples of our strategy in action. I will now turn it over to Bruno to discuss our offerings and talented strategy that brings these results to life.

Speaker 8

Thank you, Cesar. It's a pleasure to be here to talk about our AI initiatives. Our ability to achieve true enterprise wide adoption has been a key differentiator for C and IT. Through a structured approach, we have successfully scaled AI across our entire organization. This positions us ahead of the market, allowing us to guide our clients with proven experience, not just theory.

Speaker 8

Our AI powered platform, Ciente Flow, has been central to this success and has become a significant factor in our go to market strategy, proving instrumental in both landing new clients and expanding our relationships with existing ones. We channel this expertise into three core offerings, unlocking measurable business impact with hyper efficient teams, driving AI legacy modernization, and empowering clients with a safe and compliant AI first transformation. Now let me show you a concrete example of hyper efficiency in practice. Our hyperefficiency offering answers our clients' critical challenges, how to innovate faster, adapt to change, and drive growth. Our approach is not about a tool, but a powerful combination of three core elements.

Speaker 8

First, our adaptive teams, which bring the right expertise and a collaborative mindset. Second, our processes, which are designed from start to finish with AI in the center. And third, our AI powered technology orchestrated by our CINT Flow platform. The results of this integrated approach are tangible and significant. As you can see, we are delivering efficiency gains of over 50% across the entire digital creation cycle for major clients in industries like insurance, retail, and consumer goods.

Speaker 8

This is achieved through a powerful partnership between our people and AI. We augment our expert teams with AI agents, allowing them to focus on how value strategic work while AI accelerates complex tasks. Ultimately, this is about more than just speed. It's about delivering a superior value proposition, enabling our clients to achieve their business goals with greater quality and predictability. We ended the second quarter with over 7,600 CINE tiers, a growth of more than 22 year over year.

Speaker 8

This deliberate expansion ensures we have the capacity and skills to meet the increased demand for our AI first solutions. Stability is just as important as growth, and our voluntary attrition rate remains at a healthy 10.6%. This industry leading retention directly reflects our culture, which fosters growth, learning, and impact. Together, this growth and stability create a powerful people platform that enables us to deliver on our promises and drive sustainable growth for the company. Now I will pass it on to Stanley to comment on our financial performance.

Speaker 9

Thank you, Bruno, and good afternoon, everyone. I'm happy to walk you through the results of another strong quarter for CINT. In the 2025, our revenue was $117,200,000 an increase of 8% from the same period last year. When adjusting for currency fluctuations, our organic revenue growth at constant currency was 12.3% year over year. This marks our third consecutive quarter of double digit organic growth at constant currency.

Speaker 9

This consistent and predictable performance underscores the resilience of our business model and reinforces our confidence in achieving our full year guidance. Our consistent growth is supported by a resilient and diversified business model anchored in our two most representative regions, North America and Latin America. In the second quarter, revenue from LATAM increased by 26% year over year and we see continued momentum there in both landing new logos and expanding our existing partnerships. North America grew by a solid 7%, showing consistent performance on top of a relevant base from 2024. In addition, revenue from our top 10 clients grew by 12% compared to the same period last year.

Speaker 9

This growth demonstrates our ability to expand within our largest accounts by consistently delivering efficiency and tangible business results. This chart clearly shows our land and expand strategy in action. We expanded our high potential cohort of clients in the 5,000,000 to 10,000,000 range from 11 clients in 2024 to 15 over the last twelve months. This growth is a key leading indicator building the pipeline for our next generation of strategic accounts, fostering sustainable growth. For the 2025, adjusted EBITDA was $21,500,000 making a 3.1 year over year growth.

Speaker 9

This corresponds to an adjusted EBITDA margin of 18.4%. In the 2025, our adjusted EBITDA grew 8.5% and the adjusted EBITDA margin was 30 basis points higher compared to the same period last year. Cash generated from operating activities for the 2025 amounted to $33,700,000 achieving an 82% cash conversion from adjusted EBITDA to operating cash. Our strong financial position provides the flexibility to pursue opportunities that enhance our competitive standing and create long term value for our stakeholders. In this context, we have a share buyback program in place and we remain active.

Speaker 9

Finally, adjusted profit recorded $12,200,000 in the 2025 compared to $12,500,000 in the same period previous year. This led adjusted net income margin of 10.4%. In the 2025, the adjusted profit was $21,800,000 a 4.3% increase over the 2024. Our adjusted diluted earnings per share was $09 in the 2025, a 3.6% increase compared to the 2024. Now I invite Cesar to comment on our business outlook.

Speaker 1

Thank you, Stanley. Based on our consistent performance over the past quarters and the strong commercial momentum we are carrying into the second half of the year, we are confident in our outlook. In the 2025, we expect net revenue to be at least $124,400,000 This represents a strong sequential step up and a year over year growth of at least 10.5% at constant currency. For the full year of 2025, we are narrowing our range and raising the lower bound of our revenue guidance, now expecting organic revenue growth at constant currency between 10.515%. This means our midpoint has also increased to BRL12.75 percent.

Speaker 1

Assuming the FX rate of BRL5.50 for remainder of the year, we expect our revenue growth at constant currency to be around two ten basis points above our reported revenue growth. In addition, we are maintaining our adjusted EBITDA margin guidance in the range of 18 to 20%. This increased confidence is the direct result of our strategy in action. A robust commercial pipeline, continued expansion with our largest clients and AI first offerings that deliver tangible value, accelerating our growth. To conclude, I want to express my deep appreciation to our CINT around the world.

Speaker 1

Your commitment to innovation and to delivering value to our clients is what makes these results possible. This concludes our presentation. We will now begin the Q and A session. Thank you.

Speaker 10

All right. We'll now begin the Q and A session. The first question comes from Puneet Jain from JPMorgan. Hi, Puneet.

Speaker 11

Sorry. Thanks for taking my question. Can you talk about, like, adoption of CINT flow among your clients and, internal stakeholders? Like, of the 120,000,000 or so of quarterly revenue, how much of those projects or revenue include some portion of of flow driven services?

Speaker 1

Thank you, Puneet. I can get this one. Basically, our adoption the adoption of CINT teams regarding CINT flow is reaching 90% of our team. So we can, as a proxy, say that 9% of our revenue now has some influence of AI and CINT flow. This is not directly related to use cases business use case relating to generative AI, but saying that now, basically, everything we do, 90%, is somehow boosted by artificial intelligence and flow.

Speaker 11

No. That's great to hear it. It seems like it's definitely higher than lot of your peers. Another question, like, are you seeing any differences in AI adoption across different verticals? It seems like financial services was very strong in the quarter.

Speaker 11

Retail, not quite as much. So what would you attribute these differences in growth rates across verticals too?

Speaker 1

I think I think financial services clearly ahead in terms of investments relate to AI first because the level of, return on investment just with efficiency is is is is amazing. So and also, especially in Brazil, we we see the beginning of a new customer experience based on chatbots, combined with WhatsApp, becoming a new a new trend. So the consumers are migrating from traditional channels, digital channels like apps and and websites to interact with the products and services through, WhatsApp and AI. So this is a huge trend and generate a lot of demand relate to creating this new layer of customer experience based on AI. So then we we see I I see a lot of move in retail regarding AI.

Speaker 1

Again, in efficiency and also in creating this new layer of customer experience. But I think in in retail and even in in consumer goods, there is a foundation to be created yet. Companies are still have to migrate a lot of to modernize a lot of legacy systems to create the data layers, create a level of, let's say, robustness in their architecture before they can leverage real benefits from AI. But this is also the source of a lot of demand, what we call kind of horizontal demand related to AI that is basically using AI for accelerate application modernization, cloud migration, several data engagements, preparing the foundation for future AI driven world. And we see, of course, maybe 40% of our demand is is vertical demand.

Speaker 1

So we improve customer experience journeys, boosting chatbots, as I mentioned, some more consulting, AI force transformation programs where the focus is AI adoption and and also a growing number of use case related to personalizations based on AI. So a lot of things happening in this space. I think financial services has an edge for sure. Got you.

Speaker 11

Thank you.

Speaker 10

Thank you, Pune. Our next question comes from Vito Tomita from Goldman Sachs. Vito, go ahead.

Speaker 7

You. Thanks for taking our questions, and hello again, everyone. So my question a couple of questions from my side. The first one is on the guidance that you increased. Was that in part due to the year being halfway done, you're having more visibility, which allows you to be less conservative?

Speaker 7

Or is demand from customers shaping up generally better than expected, being surprised positively? And also, thinking across regions on that line, are there my second question would be if you see now some regions where you are now more optimistic or less optimistic than before in terms of demand compared to earlier in the year?

Speaker 1

Sure. Great to see you here, Victor. I think in terms of our guidance, I think this new outlook is supported by two factors. The first is our consistent performance in the first half of the year, so we deliver ahead of our initial expectations. And the second is is the current solid commercial pipeline for Latin America and North America.

Speaker 1

So to give you a data point, pipeline now is 25% higher than in the same period last year with a healthy conversion rate. So this so basically, we we we did a very strong and consistent q one and q two, and we have a very strong pipeline that increased our confidence in our forecasts and guidance. The second question regarding regions, I think we are we continue to bet a lot on North America and Latte. That is basically 90% of our revenue. And we see stability from Q3 and Q4 for the Europe and APAC regions, Maybe a small increase in the last quarter for these emerging regions and a good prospect for 2026.

Speaker 7

Clear. Thank you very much.

Speaker 1

Thank you for your question.

Speaker 10

Thank you, Vito. Our next question comes from Gustavo Farias from UBS. Hi,

Speaker 12

Hi, everyone. Thanks for taking my questions. So I'd like to start off by asking about the revenue growth. If you could break it down between the components of new engagements, both new clients and the ramp up of current clients and also the price, what comes from price component? And the second one, we've seen some sequential improvement in LATAM, which was very positive in our view.

Speaker 12

I'd like to compare it to your view from last quarter. There has been some volatility in IT budgets. Just wanted to know your view on that, if it has improved or how you see the overall landscape in the industry?

Speaker 1

Thanks, Gustavo. The first question regarding our growth is 90% expansion inside our current portfolio and 10% is contribution from recently acquired clients. So this is basically, in general, our land and expand ratio, and we are keeping the same pace this year. Regarding regions, and particularly, you mentioned Latin American, I think the the and we grew 26% year over year this quarter in in reported revenue. I think it's driven by, I would say, a surprisingly fast AI adoption in Brazil, both among customers, consumers, and enterprise.

Speaker 1

It's it's I see, especially in financial services, I think a base that is unique even comparing to more developed markets like The US. So I think this is probably part of the explanation why we we have such a traction in Brazil and in financial services.

Speaker 10

Thank you, Gustavo. Our next question comes from Brian Bergen from TD Cowen. Hi, Brian.

Speaker 13

Hey, guys. Can you hear me?

Speaker 10

Yes.

Speaker 13

All right, great. So my two questions. First, just on EBITDA, we'll talk margins first here. Can you talk about the EBITDA margin drivers on a year over year basis in the second quarter and the path to hitting the guide in fiscal twenty twenty five? It seems like FX headwinds may be a bit of play, but I'm just curious where you feel most comfortable in that 18% to 20%.

Speaker 13

And my follow-up, could you just discuss you've had good hiring in the first half. Can you talk about hiring intentions in the second half and how you expect to exit the year?

Speaker 9

Brian, thank you for the question. Well, with regard to your first question, I can handle that one. EBITDA, we have delivered we improved sequentially, delivering 18.4% of the EBITDA adjusted EBITDA in the second quarter. And basically, we have a seasonality built in our business throughout the quarters, right? As in the first quarter, we have a salary increase.

Speaker 9

And typically, we throughout the year pass on prices and improve margins. Also, we are in the first half, we've been investing in hiring, preparing ourselves for the second half demand that is ahead of us. And of course, those resource those people when they mature and they become billable in the second half. This will also improve gross margin and EBITDA. Also another driver is efficiency gains from AI that we are experimenting at the G and A level together with a very disciplined cost management there and of course, the scalability that it provides.

Speaker 9

We continue to balance this strategic investments in hiring, training and in our AI platform to support our growth. And typically looking ahead, we expect our margins to continue improving the second half with the combination of all those factors. So we are very confident to in our ability to deliver this full year adjusted EBITDA margin guidance of 18% to 20%.

Speaker 8

Just to complement on the staff growth, Brian. Most of that staff growth is actually coming from our trainee program. We hired like 500 people in beginning the of the year that will as Stanley mentioned, we will start billing in the second half of the year. And so that's the most part of that the higher rate of people growth than revenue growth that you see there. Right?

Speaker 8

So and that's that will kind of balance out in the second half. And that's we're very excited about this special edition of the training program because this will be the first generation that we're kind of enabling these people to only work with AI, right? So there's no adaptation or kind of learning curve. It will be the first native AI developers that is trying to rank. So we're super excited to put that in action.

Speaker 13

Our

Speaker 10

next question comes from Luke Morrison from Canaccord.

Speaker 14

Hey, guys. Good to see you. I got a couple here for you. So great great to see your largest client continuing to grow really strongly, real testament to the strength of that relationship. Could you maybe just share like what's working particularly well with that customer?

Speaker 14

And if possible, clarify like what does constant currency look like with that client today? And then across the rest of your top 10 clients today, are are you seeing similar momentum and or potential? And, again, would it be possible if you could also just frame constant currency growth within that group?

Speaker 1

Sure. Hey, Luke. Great to see you here. I think our we see a very solid and consistent growth in our, largest clients. We we had, sequential growth in eight out of 10 of our top clients.

Speaker 1

Of course, top one was a very good performance, is a very large financial organization. So we expand across several business units. Basically, we credit that to our ability to demonstrate the kind of differential productivity and effectiveness of CINT Flow in our AI approach. So driving efficiency and also leverage AI adoption across the board, I think, is the probably the main reason why we are expanding in such an amazing way. But we see the same happening in different areas of our largest clients.

Speaker 1

Everyone now is looking for both combining, find a way to to be more effective regarding more concrete, regarding the benefits of adopt adopting AI, but also starting to prepare the foundational, legacy systems, data lakes, and so one to really drive value in the the next phase of generative AI and and and the evolution of the capabilities of these large language models. So in terms of constant currency, I don't know if Stanley or go along can

Speaker 9

What I can bring here, Luke, is for the top client in terms of constant currency, we we grew year over year 92%, yeah. The top 10 clients, I don't have the constant currency data here. It's close to 12% growth year over year, right. And if we get of course, we have top 10 clients, they vary from another from one year to another year. If we take the current existing top 10 clients, that cohort grew 23% year over year, right?

Speaker 9

So it's another data point. So the existing top 10 clients, they grew 23% year over year. That's a reported currency. I don't have a constant currency for that as well.

Speaker 14

Excellent. Very, very good color. Thank you. And then maybe just a follow-up. How would you say you know, is there any difference between your US client base and how that's trending relative to Brazil today?

Speaker 14

Are you seeing any differences in spending patterns or or project types, maturity in in terms of adopting AI? And then are there any signs of of macro caution or or tariff driven instability in either market that you're seeing, with the recent geopolitical, stuff going on?

Speaker 1

Sure. I can start here, and Bruno, feel free to add on. I I see, especially financial services in Brazil, where where we have a very competitive environment, investing a lot and with a very high urgent sense of urgency regarding artificial intelligence. I see solid moves in The US, but maybe not as as we we are seeing in in Brazil. We have, of course, for US, we have a larger exposure to consumer goods that is has a different dynamic.

Speaker 1

It's also leveraging the benefits of AI and this new age of disruption, but in a fashion than a pure tech business like financial services.

Speaker 8

If I may add, look, if you divide the opportunity in two sides, Luke, one is internal, right, the efficiency play, right, that Geniei can bring. And that I think there's there's very little difference regional even or even vertical. Right? So everybody's kinda trying to seize that opportunity. So all verticals, all regions, people are investing to kinda try to seize the opportunity of increasing productivity.

Speaker 8

Right? I think what is different here, and I think the big picture, you look at the big picture, we're going to see massive investments in GenAI when there's consumer pressure. That's when there's consumers asking for this new different way to interact with brands and organizations. And to be absolutely frank, we haven't seen that yet. We don't we didn't reach critical mass yet for consumer to actually to consumers to be provoking, challenging their banks, their telco companies, that the companies that they interact with, asking for that different experience.

Speaker 8

But that will come. That will certainly come. That's down the road. It's just a matter of no consumers getting used to it. And to Cesar's point, we're already seeing this started in Latin America, right?

Speaker 8

So when that started, then the genie is out of the it's out of the box, and then there's there's no putting back. And then the the level of investment, we expect it to, you know, to increase exponentially because then it's that's that's not a to capture, you know, a a couple percentage points in in in margins. It's actually to survive to to kind of to fight for consumer attention and and relevance. And then the investment will speed up and and will increase significantly. And and that will come.

Speaker 8

It's hard to predict when, if it's in six months or eighteen months, but it will come.

Speaker 14

Excellent. Very, very helpful color. And maybe just to, the the last part of that question, the the tariff driven, instability, are are you seeing anything there?

Speaker 8

No. Not particularly. I think we are again, financial not directly, right? So our clients are kind of protected from that. We will have a big exposure as in all financial services and consumer goods and even consumer goods.

Speaker 8

It's majority of that consumer goods portfolio is actually food and beverage, which is kind of a more local supply chain. So very, very little exposure there in the portfolio clients for for the tariffs. But if it's, you know, no one is 100% protected, but that's that's where we are right now.

Speaker 14

Excellent. Okay. Thank you, guys.

Speaker 8

Thank you.

Speaker 10

Thanks, Luke. Our next question comes from Maria Clara from Itau. Hi, Clara.

Speaker 15

Hey, everyone. Thanks for taking my questions. So the first one is related to the revenue buildup of CINT. We hear from some channel checks that the evolution of AI is probably having a deflationary impact in top line growth trends of this industry going forward. So just wanted to check if you agree with this information and if you could share with us how you think about the evolution of volume and price going forward in the following quarters.

Speaker 15

And the second question is related to utilization rates. You have been accelerating the hirings. So just wanted to know how you think about the potential improvement ahead. Thank you.

Speaker 1

Sure. Thank you for your questions. I can get the first one, and Bruno can can get this handle the second. Regarding, we don't see, this is this is such a fragmented market. IT services is very is hugely fragmented across the world.

Speaker 1

So is we don't see a shortage of demand. What we see now is lot of difference in performance among the players, and this is a huge opportunity. We we believe we are in the frontier of productivity and effectiveness of using AI to streamline the whole production of digital solutions. So we are taking advantage of this edge to replace poor performance competitors. And so we basically are seeing a lot of opportunities to expand our client wallet by replacing no AI or poor performance competitors and also increase our land capabilities with the new set of offerings we are designing around the new possibilities regarding artificial intelligence.

Speaker 1

There is regarding pricing models, I think the rise of AI in the IT service services industries inevitably we will open space for a more flexible, value based pricing models closely, maybe more closely tied to the business outcomes. We also see the need to gradually monetize the intellectual property embedded in those new agentic architectures. So and when we look at our cohort of large enterprise, we anticipate a gradual shift from traditional time material or fixed price projects to these new models over the next few years. So it's an amazing and perfect moment to proactively test and refine this approach with our clients, and we are already doing so in several fronts in a, I would say, a very controlled way. And and we have some encouraged early results.

Speaker 1

And it's it's gonna happen gradually along a set of set of years. And I see as a midterm opportunity to translate superior performance into margins while maybe mainly strengthening our clients' partnerships by giving them more options in terms of pricing model. I think this is a good news for for the whole industry and companies with more ability to execute more with more strong confidence on on their execution capabilities, you capture more value for sure. That's the way I see pricing models evolving in the IT service industry and how I see CIT benefiting from it.

Speaker 8

If I can add to the volume discussion, Marieke, and thanks for the question. That's the $1,000,000,000,000 question. The volume back to my previous point, I think people are looking at this from the current lenses, which is kind of just the efficiency lenses and the internal use of GenAI. I think, again, when we move to consumer facing interfaces and the experiences of how GenAI will be embedded in a completely rechange the shape of digital experiences, right? So with agents, with completely different experiences, so replacing all the mobile apps and websites and the transactions that we know today.

Speaker 8

This will all have to be rebuilt and rewritten, right? So this a tsunami of volume that is ahead of us, right? So and not to mention also there's the yes, productivity will go up by a lot. And this will also would tilt the scale in between package solutions and custom built software, right? So a lot of those build versus buy decisions that we see today will completely change in three to five years, right?

Speaker 8

So and we'll tilt towards building our own software because it will be cheaper and faster than depending on a provider that has a package solution, right? So that is also will kind of tilt the balance towards volume, towards services. So I think those things are underestimated because they're not being seen today, but they're massive and they're coming. And we're very excited that they will come.

Speaker 10

Utilization rate?

Speaker 8

Utilization continues to be very high, around 85% to 89%. So our kind of delivery machine continues to be a shiny and well oiled one. That's that we're very proud that we have solid and very well established delivery processes. It's not coincidentally, I don't know, 90% of our growth comes from the portfolio because you happy the clients that keep buying more and increasing wallet share. That's the recipe, and we continue to execute on that.

Speaker 15

Thank you for the answers.

Speaker 8

Thank you.

Speaker 10

Thanks, Clara. We have a follow-up from Brian Bergen from TD Cowen regarding client behavior around GenAI and AgenTeq work. Clearly, you're gaining traction with Flow. Have you had any trends where clients thought they could do it themselves and then have circled back to C and T because it was too complex and they needed help? If so, how broad based has it been?

Speaker 10

And if that has occurred, was there any different behavior where it may have been more design agency type activity versus pure software development type activity?

Speaker 1

I can start this one. Thank you, Brian, for your question. I think there is a lot of clients that are afraid of the complexity of the capabilities they need to develop if they want to have a full stack competence around AI. But there are some clients that are strategically, they see themselves as future tech based companies. So they have a long term ambition to to have a more set a larger set of tech and AI capabilities internally.

Speaker 1

And we have value prop for both our archetypes, so we can really partner part of our clients and extend their capabilities with CINT, full stack AI and tech capabilities. And, also, we have some clients where we are helping them to internalize the new set of AI capabilities and methodologies and CI and T flow also as part of a way to speed up adoption of AI and creating hands on experience for the technical teams and nontechnical teams, or as we say, for the coders and non coders. Because now I think every single professional need to be rescued with the AI possibilities to expand their problem solving capabilities. So flow is not only designed for coders. Of course, there's a lot of things there regarding improve the building, the technical building of digital solutions, but also there is a lot of things happening in the space of creating the right environment for non coders, for professionals from HR, from marketing, from finance, from any any area of supporting area of a company to increase their AI abilities and leverage value creating new agents, AI agents and workflows around AI.

Speaker 1

So huge opportunity. We are preparing for any kind of demand our clients have. And I see a mix of companies counting more on outsourcing and and strong partnerships with companies like CIT. And companies decided that they need in the long term, they will need to internalize part of this or a good chunk of this expertise, and we are there to help them too.

Speaker 10

All right. That concludes our Q and A session. Sasa, back to you to proceed with your closing remarks. Thank you all.

Speaker 1

Sure. Thanks, Galvan, Bruno, Stanley. Thank you all for joining us today. I'd like to extend my sincere appreciation for all CIN tiers around the world. We are almost 8,000 CIN tiers now, and I'm always always amazed for you with your dedication.

Speaker 1

And, again, amazing results this quarter, and let's keep pushing. A special thank you as well for our clients for choosing CINT as a partner for co creating this exciting new area of AI driven innovation. Stay well. See you soon.

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