CI&T Inc

Technology is more than a device, system or industry.

Technology is built by people for people. It's built for people with desires and needs and ambitions. By our people who are talented, curious, creative and diverse.

Our people use innovative strategy, design and engineering to offer end-to-end solutions that help companies to quickly transform and scale their operations globally.

While we create technical solutions, all we really want and what motivates us is to make their tomorrow. Make their tomorrow.

To make their tomorrow.

CINT, we breathe and build tech to make their tomorrow.

Good morning, everyone. Welcome to CINT Earnings Call for the third quarter of 2022. I am Eduardo Galvão, Head of Investor Relations at CINT, and it's a pleasure to be here again to talk about our results. With me on today's call are Cesar Ghosn, Founder and CEO, Bruno Guicardi, Co-Founder and President for North America and Europe, and Stanley Rodrigues, 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 question and answer session for analysts and investors only. If you'd like to submit a question, please send it via email to investors at cint.com. This presentation is available on the company's investor relations website at investors.cint.com. 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, and as such, are subject to known and unknown risks and uncertainties, including but not limited to those factors described in our earnings release and discussed in the risk factors section of our annual report on Form 20F and other reports we may file from time to time with the SEC. These risks and uncertainties could cause actual results to differ materially from those expressed on this call. We caution you not to place and do reliance on those forward-looking statements because they're valid only as of the date when made. During this presentation, we'll comment on certain non-IFRS measures to evaluate our business. Please refer to the reconciliation table of non-IFRS measures in the appendix for more details. Our agenda for today includes an update on recent events, followed by some of our successful business cases and a few highlights. We'll then talk about our people strategy and discuss our quarterly financial results. At this time, I'd like to invite Cesar Ghosn to begin our presentation. Cesar, please.

Thanks, Eduardo. Good day, everyone, and thank you for joining us today. It's always a pleasure to be with you and have the opportunity to talk about CINT, our latest news and results. Before we start, I want to mention a milestone for CINT. Last week, we completed one year of the IPO at the New York Stock Exchange, launching what I believe will be the most exciting chapter of our journey. With the cash proceeds of the IPO, we have expanded our operations globally through acquisitions, opening new markets and verticals, expanding our global talent base, and building a sustainable platform to speed up our organic growth. As you know, those 12 months were marked by a non-trivial macroenvironment. We have been in business for 27 years and we have had the opportunity to face several of those cycles of abundance and downturn. And how have we achieved 27 years of consecutive profitable growth? In one word, adaptability. It's an essential part of our DNA and the core of our entrepreneur organizational model. And it's also what's behind the results we are presenting today. So I'm happy to be here for our fifth earnings call. Last month, we proudly announced the acquisition of Intersol, a US-based company providing digital transformation services to leading companies in the financial sector. Headquartered in Irvine, California, Intersol has been helping companies rethink and reshape their operations for the digital age. This acquisition has added more than 170 U.S.-based digital specialists to CINT, including an executive roster of seasoned entrepreneurs, a core team of business strategists, digital product specialists, and highly skilled developers. This move further expands CINT's operations in North America, practically doubling our onshore team in the U.S. and bolstering the company's capabilities within the financial services industry. I'm excited to welcome the talented team of Intersol to the CINT family. With Intersol, we conclude our first wave of acquisitions, and I would like to take this opportunity to add some colors to our approach. First and foremost, we see acquisitions as an opportunity to speed up our organic growth, accelerating our presence and reputation in specific geographies or verticals. In that sense, we designed a programmatic M&A plan that we have been executing in a very disciplined manner. In mid-2021, we acquired Dextra in Brazil. And since our IPO in November last year, we concluded four acquisitions. Somo in the UK, Box1824 in Brazil, Transpire in Australia, and Intersol in the US. Each of them is founder-led and has an evident cultural fit with CIMT. They are also growing and profitable companies. supporting big clients through talented teams that complement our capabilities in different regions and verticals. We have been very selective, and our efforts are paying off with smooth integrations. These Bodon acquisitions have been integrated as new growth units, guaranteeing an immediate and low-risk business integration. To contextualize, SOMO, Box 1824, and Transpire are already fully integrated from a business standpoint, and in a saw, we'll be operating as a new growth unit under the CINT brand before the end of this year. A dedicated squad has been coordinating the integration process in each region. Our agile organizational model allows combining a rapid business integration while executing a careful back-office IT systems and process consolidation. With these moves, we amplified our footprint for robust organic growth in our four upper-rated regions, North America, Latin America, Europe, and Asia-Pacific. So, we conclude this first cycle of M&As by reinforcing that organic growth continues to be our primary focus and strategy for value creation. That said, let's take a look at our quarterly financial highlights. We are glad to present another set of high revenue growth with solid profitability metrics. Our net revenue in the third quarter of 2022 grew 49% year over year, of which 35 percentage points were organic growth and 14 percentage points were acquisitions. Eliminating FX fluctuation, our net revenue at custom currency grew 51% above our guidance of 46% for the quarter. We reached 147 clients with annual revenue above 1 million Brazilian reais from 76 in the third quarter of 2021, adding 71 new clients in the last 12 months. The adjusted EBITDA margin in the quarter was 19.2% and continues improving sequentially as planned. We ended the third quarter of 2022 with 6.9 thousand CITers, a net addition of 1.5 thousand employees year-over-year. I'm never tired of mentioning how proud we are of our consecutive revenue growth throughout 25 quarters, even during challenging times with events such as the COVID pandemic outbreak and the war in Eastern Europe. This consistency demonstrates our ability to adapt according to market conditions and continue to generate value for long-term clients. Stanley will dive into our financial results in more detail shortly. But before that, I want to express my gratitude to all CIN tiers that have been committed to making this happen. Thank you. Now let's see some examples of our engagements with clients worldwide and some of our business highlights for the quarter.

Bees is a global digital ecosystem created by AB InBev with support from CINT. The project began with the goal of developing a B2B platform for small retailers who were not reaping the same benefits from digital transformation as larger retailers. With a product mindset, the project evolved to an ecosystem approach with different features to facilitate access to ABI's products worldwide, and it was recently opened to other companies in the marketplace model. To help customers thrive, Bees is designed to scale rapidly, reaching new countries with the ability to understand the needs of each region and adapt to them. In less than three years, these already represents 55% of ABI's revenue and is available in 19 countries. We collaborated to create an innovative global solution that completely reimagined our client opportunities.

Bayer, a life science company with a more than 150-year history and core competencies in the areas of healthcare and agriculture, reached out to CINT to orchestrate the data organization for its Latin American agribusiness sector. This need came from the lack of data integration for deep analysis, which led the company to manual processes and lack of data-driven decision-making. Using CINT's proprietary data journey approach, Bayer was able to enhance its data capabilities to generate insights and democratize the most reliable data for the company. In just 70 working days, CINT delivered to Bayer a data platform that considers with the first batch of analysis, governance, and accuracy in data management within the company. In this platform, Bayer can carry out descriptive analysis, and also it can have predictive insights and trends in a systematic fashion. As initial results were made available, the project decreased Amazon Web Services development costs by 65%, increased trust in data, and enabled hybrid intelligence, facilitating machine learning and a data-driven culture.

PEXA is just over 10 years old itself as a business. Way back in the beginning, it was just a little small startup. When I joined, there was probably about 30 employees. Now PEXA is a publicly listed business with global aspirations and way more than 500 employees. So it's been quite a journey. And now we are looking into new areas of growth for the business. PEXA and Transpire have come together a few years ago and You know, one of the big items that we've worked with Transpire on is really our customer journey. So PEXA has quite a varied customer segmentation that we have to deal with. Lots of different segments, lots of different customers with lots of different needs. And Transpire have worked with us to really document those. They've interviewed many of our customers. They've played back those journeys to the PEXA group and the PEXA team.

Our relationship with PEXA is fantastic. It is one based on mutual respect. It's understanding what each party brings to the table. And importantly, it's based around shared values. We're both committed toward transforming. We understand that the status quo is not acceptable, but the extraordinary thing about our relationship with PEXA is the support we get to actually bring about that transformation and deliver that outcome, that sort of human-centered approach that we're looking for.

I'm really protective of my customers and for me I always feel confident and I think it's because I trust Transpire so I think having that level of trust means that I always feel confident knowing that a Transpire employee is going out to speak with our customers that what they're going to bring back is going to be really accurate and informative and valuable so I think for me it ultimately comes down to that level of trust particularly in my role and particularly when it comes to our customers I think that's one of the most critical factors.

Planet supports 800,000 customers across 120 countries and is supported by a global workforce of 2,500 people. The company was founded as a tax-free shopping and payment specialist, assisting merchants, acquirers, and shoppers by providing digital payment services on a single platform that offers acquiring, processing, digital wallets, currency conversion, and other services. In the last couple of years, Planet has expanded its business through the acquisition of a number of hospitality and hotel-based software businesses to create a truly integrated payments service. With the support of CI&T, Planet is undertaking a huge program of work to integrate its different platforms. CI&T were given the challenge to not only create a new lead-generating digital platform, but also undertake an in-depth customer experience study to determine a longer-term Google Tag Manager strategy and roadmap. The project began in July 2022 with the simultaneous delivery of a customer-facing MVP that would begin to generate leads for the business and a jobs-to-be-done lead strategy into customer needs, desired outcomes and optimal journey. This culminated in a detailed in-two-year digital roadmap. The first iteration of the platform went live in November and is the foundation that will be built on over the coming months. It consists of a single proposition website for the company, consolidating all service offers into an organized and digestible format that will allow the company to upsell, cross-sell and attract new customers whose needs will be served with one of the first truly integrated payments platforms.

Ntursil is a United States-based strategy and technology firm that helps leaders in financial services rethink and reshape their operations for the digital age. Cint acquired the company in October to expand its presence within North America's banking, financial services, and insurance verticals. Ntursil has deep expertise in these fields and a footprint of more than 170 digital specialists in the US, which perfectly fits our global growth ambitions.

For the 16th consecutive year, CI&T has been named a great place to work in Brazil. In October, we reached the fourth in the ranking, our highest position ever. We consider this recognition and certifications in other countries as genuine feedback from our people about what it is like to work here and as a confirmation that we are on the right track.

Web Summit brings together the people and companies redefining the global tech industry. Based in Lisbon in 2022, we were in the event contributing with our view about the changes tech can make in breaking the status quo. Bruno Ghikardi was one of the speakers, shedding light on making products that speak. His panel discussed how digitalization enables you to scale up your operations, But, posts scale up how companies can nurture individual relationships with your consumers and can offer tailored products and experiences. Participation in this event allows CINT to be at the forefront of global tech discussions, contributing to building thought leadership.

What if a company could create business impact faster through software development excellence? Research shows that most existing software engineers worldwide are estimated to be working outside the technology industry, and this count is rapidly increasing. However, even though almost every industry has IT departments as critical areas for growth, most need help to have high-performance teams that really impact the business. we launched the tech booster powerhouse to strengthen our clients capabilities to execute top-notch software development that is directly connected to the value creation of the business the powerhouse is a global network of technologists focused on improving team performance through digital accelerators methods and practices at the forefront of digital development

Hello, hola, and g'day mates. I'm Josh Guest, the founder and CEO of Transpire. We started our company in Melbourne, Australia, and today we have a national footprint with around 100 digital consultants who share in our mission, which is to weave humanity into technology. I'm so excited we are joining the CINT family. It's clear that our cultures are aligned, and so is our passion to leave a positive impact on the world through technology.

Hi, I'm Felipe Rubin, CIT's Vice President for Asia Pacific. I'm super excited to have Transpire joining our CIT family. Between the two companies' history and experience, there's just this perfect fit of our cultures, capabilities, and growth ambitions. By combining our strengths, CIT will be providing our end-to-end services capabilities, as well as our well-known global employer value proposition to the Australian market, also by bringing global innovation with scalability. and by leveraging transpires footprint and experience we will be providing additional capabilities to our clients in asia while also helping them activate additional value to their customers it's the beginning of a new era new habits

new technologies new connections everything new again changes that force us to transform learn adapt be up to date and ahead a critical question to consider how to thrive in a post-digital transformation era CINT presents its new global approach to work with its clients. Digital speed and efficiency. Speed and scale in four pillars for businesses to adapt to ever-evolving scenarios. Developer velocity. Application performance. strategic sourcing, and measurable outcomes. Discover the next step for companies after digital transformation with CIMT.

We started the Black Identity Program in 2020 to increase the representation of Black people within Cintiq. Back then, our community was only about 10% of the company's employees. Although in Brazil, this community represents more than 50% of people. We designed the program to attract young professionals, train them through boot camps and real-world experiences. fostering their inclusion and capabilities to face real projects at CMT. Also, we hired experienced professionals that showcased the importance of Black representation at different levels within the company. As a company, we had little brand awareness towards that community. And the program helped us to learn and engage with anti-racism strategies and policies.

I was still discovering what a programmer or a programmer was doing and I came to learn this here at C&T and it's that thing, we are bringing you not a complete developer, but a person that we are going to develop here and I see that this is very much what C&T does. It was amazing, it has been amazing, I continue, it's been two years, but two years learning.

We did this in partnership with organizations whose sole purpose is to serve the community, taking an ecosystem approach. Once the new tenants arrived, we worked to guarantee their inclusion inside Cintiq, working alongside leaders and teams about diversity, equity, and belonging. As a result of that initial effort, we hired 37 Black professionals, and two years after the program, 8-9% of those people are still Cintiq employees. Finally, this work supported our Black community's growth and inspired new programs in the years that followed. Now, Black people make up about 20% of Cintiq's workforce globally.

Since 2012, DevCamp has fostered innovation and technology for the developer community. For those passionate about deep tech, the event is the right spot. Look what happened in the 10th edition.

DevCamp brings the experience of other people and the inspiration that other people can generate in the market, in the communities, in the people, through the stories they lived, the knowledge they learned, and this serves as an example for other people to follow and develop. For us, it is very gratifying to see that the work we do, this contribution, this retribution, in fact, it generates value for people and people seek and participate in DevCamp. We thought about this exactly when we were thinking about the idea of a digital forest. It's a complex forest, it's hard to walk in this forest, but the lecturers found a very easy way to navigate through different parts of this forest. C&T was fundamental in the implementation of the event, it bets and it has this interest in contributing to the development community. So the implementation was all done by C&T, the people of C&T participated, which is very gratifying for us.

Lots of cool stuff, right? So now I invite Bruno to talk about our global talent strategy.

Thank you, Cesar. And good morning, everyone. Great to be here again. Our global talent base continues expanding, and we ended the quarter with almost 6,900 CINTers, a 28% growth year over year. I'm very proud to tell you that last month, CINT was ranked fourth in the Great Place to Work Brazil within the large companies category, and first among tech services companies, as presented in the video. This is our 16th consecutive year being awarded this recognition in Brazil, and we also have been recognized as a great place to work in all countries we operate. This remarkable achievement demonstrates our ability to keep attracting and retaining the best talent in the industry and providing them with an engaging and diverse environment where they can be themselves and reach their full potential. As we expand our operations globally, we have strengthened our talent base in strategic regions to guarantee global coverage to our global clients. Recently, we increased our talent base in Australia with the acquisition of Transpire and expanded organically in Colombia and the UK. Brazil used to represent 93% of our headcount a year ago and now represents 87%. And this trend of talent-based diversification should continue going forward. For example, with the acquisition of Intersol, we'll practically double our own side team in the US, which is our fastest growing market. Finally, we continue to enhance our remote work and work from anywhere programs, integrating them into our daily operations and benefiting from what we think is a huge opportunity to tap into new markets for talent. Now I invite Stanley to give you more details about our financial performance.

Thank you, Bruno, and good morning, everyone. Excited to walk you through our quarterly financial results. Our net revenue in the third quarter 2022 was R$ 559 million, a 49% growth year-over-year. The acquisitions concluded in 2022 contributed to 14 percentage points of revenue growth in the quarter. When eliminating the FX variation, our net revenue at constant currency grew 51% compared to the third quarter of 2021. This performance is above our guidance of 46% of revenue growth at constant currency for the quarter. Our strong revenue growth reflects our lend and expand strategy combining expansion within existing clients and the addition of new clients every quarter. Our programmatic M&A strategy also contributed to speed up our revenue growth. Throughout the nine months of 2022, we continued to diversify our client base with the addition of 53 new logos with revenue above R$ 1 million to our portfolio. The number of clients with revenue above R$ 20 million increased from 16 in 2021 to 22 clients year-to-date, while the number of clients with more than R$ 5 and R$ 10 million also increased consistently. Our net revenue retention rate over the past five years has been around 120%, which demonstrates that new logos should also expand and flourish over time, guaranteeing our sustainable growth towards 2023 and the following years. CINT recorded revenue growth in the quarter within all regions and within all industry verticals that it operates year over year. North America remains our fastest growing market organically and it should be more representative as of the fourth quarter 22 when we will incorporate the results of Anthersol. The same is valid for Asia Pacific region with the consolidation of the transpired results. As Cesar mentioned, our M&A strategy has been to expand our geographic footprint, creating a global platform for organic growth. Analyzing the performance of our main industry verticals in the nine months of 2022 compared to the same period of last year, Revenue from financial services grew 38%, food and beverage increased 27%, TMT grew 99%, and farming cosmetics increased 50%. Our client portfolio is pretty well balanced in terms of regions and industry verticals, as you can see in the chart. Moving on, our adjusted EBITDA in the third quarter was R$107.3 million, an increase of 34% year-over-year. Adjusted EBITDA margin was 19.2% in the quarter, a reduction of 2.1 percentage points compared to Q3 2021, mainly as a result of two factors, lower margins from recently acquired companies and an increase in G&A expenses in light of our IPO. Sequentially, the adjusted EBITDA margin improved to 19.2% in the third quarter 2022 from 19.1% in the second quarter 2022 and 17.5% in the first quarter 2022 as a result of gradual price readjustments on our contracts, which is a seasonal effect. In the third quarter 22, adjusted net profit was 69.5 million reais, 157% higher than third quarter 21. The adjusted net profit margin was 12.4%, an increase of 5.2 percentage points, and it was mainly due to two factors. Lower net financial expenses as a result of positive foreign exchange variations in the third quarter 2022, partially compensated by higher interest rates on loans. And a reduction in income tax expenses because of our corporate reorganization concluded at the end of last year in connection with our IPO. Wrapping up, as Cesar mentioned, our priority continues to be fostering our organic growth, including leveraging the recently acquired companies. And now, I invite back Cesar to comment on our business outlook. Cesar, please.

Thank you, Stanley. Based on current market conditions, we expect our net revenue in the fourth quarter of 2022 to be at least 605 million Brazilian Reais, a 41% growth year over year on a constant currency basis. For the full year of 2022, we are increasing our outlook and expect net revenue growth of at least 58% year over year on a constant currency basis and reported revenue growth of at least 51%, which includes a negative FX impact of approximately 7 percentage points. And we are maintaining our adjusted EBITDA margin guidance of at least 19% for the full year of 2022. Thank you all for your trust in CINT and for attending our call today. We now conclude our presentation and may move to the Q&A session. Thank you.

All right, we'll now begin the question and answer session. I'll announce each participant's name. Once you hear your name, please unmute your line and ask a question. Then, when you're done, please mute your line. The first question comes from Pune Jane from JP Morgan. Pune, please go ahead.

Hey, thanks for taking my question and nice quarter. I wanted to ask about client priorities. If you've seen any changes there over the last three months, are you seeing any delays in new project starts or clients preferring cost-saving deals over digital transformation at all? Have you seen any changes in the way clients award new contracts or the type of projects that they award?

Thank you, Pune. I can get this one. I believe we still see a strong pipeline from our clients, but there is some trends related demand, as you mentioned. I think This is basically, I think we can see on two perspectives. First is speed. I think customers are selecting initiatives based on the time to return. So shorter cycles between investment and getting evidence of the results. And a second trend is efficiency. I think it's important in such a a macro environment. And our metrics demonstrate that a high performance team can deliver 10 times more than a low performance team. So there's a lot of opportunities to increase throughput without necessarily increasing investment. So I believe these two trends, the speed in the sense of time to return, shorter cycles for see concrete results for the digital initiatives, and efficiency. A huge discussion about how we can do more with the investment we are already doing around digital.

Got it. No, that makes sense. And then if you can talk about directionally, if you can talk about expectations for 2023 growth, a lot of concerns around macro there, not just for you, but generally for the sector. So, how should we think about, like, as we build our model, your Q4 guidance is heavy. How should we think about 2023 trends, growth trends on constant currency organic basis?

Sure. We are still working on our 2023 budget, and we will disclose a full year guidance on our next earnings release. But what I can anticipate is after this solid 2022, we expect another solid year, even considering the macro environment. I think we have, by now, great visibility from our long-term clients. And as Bruno and Stanley mentioned, we have a consistent net revenue rotation rate in the past, and we foresee that it will continue. This year, we added 53 new long-term clients in the last nine months. So new platforms for growth. And also, I think we create a robust footprint for growth with the recent acquisitions in different regions. So now we have a better footprint for Australia, for UK, even for US. So we are still working on this, but we are confident. in our ability to deliver solid growth next year, as demonstrated by our track record. Got it. Thank you. All the best. Pleasure. Thank you, Pune.

Thank you, Pune. Our next question comes from Tyler Dupont from Bank of America. Tyler, go ahead.

Thank you. Thank you for taking the question. Just jumping off of Pune's earlier question, are there specific geographies or verticals that are seeing particular signs of strength or weakness and the conversations you're having with clients around that. I mean, when looking at each vertical, it looks like there's pretty strong growth sequentially, particularly within TMT. So is there anything also specific to call out there and maybe just comparing that to financial services, which looks like it was relatively flat quarter on quarter?

Thank you, Tyler. I can start this one too. We don't see any specific difference. We have been growing consistently in all verticals and geographies. I believe there's big trends on specific verticals. I can highlight financial services is too strong. I think mainly based to the customer experience war. from the competition among the traditional big players and and the fintechs we see new trends coming from crypto and blockchain use case uh around trading custody of digital assets international payments peer-to-peer transaction nfts and so on we see open banking not only the regulatory demand, but also new services like personal finance, payment insurance, and other services. If we go for retail, we see massive investments around e-commerce, omnichannel, and marketplace strategies, too, a big trend in this sector. But now, I think combining with maybe more advanced technologies, programs around data with advanced analytics, machine learning approach, providing I would say valuable and actionable recommendations for retail companies. And also a trend of combining sales journey in store and online logistic around same day delivery and discount payments, a lot of new stuff comes on the payment and so on. If we go for consumer goods, I think data is the main use case, especially using productive analytics. and big data to understand consumer behaviors and and foster digital sales or accelerate product development and mobility a lot of innovation around mobility connecting wearables and a lot of use case around that too. So I think this is across the board. Of course, it's emission. Every single product now has a meticulous discussion about the value, what it's going to be created, the speed you can demonstrate, the results and the efficiency, how productive the teams are and how effective

you are alone this this opportunities okay great well i i appreciate that um and then just kind of on the on the other side on the supply side um maybe if you could speak to any of those specific supply side dynamics that you're seeing whether that's you know attrition utilization um and if you're seeing any wage inflation pressures still uh or if those have subsided and just kind of update how that flows into margins that'll be helpful thank you

Bruno, can I get this one?

Yeah, I can take that one. Yeah, we're seeing that competition subsiding a little bit with the recent slowdown and with the startup world and big tech. So attrition is trending down. We were down one notch to 15% compared to 16% last quarter on a last 12-month basis. And we're expecting that it will continue to go down going forward. So that's good news. It's still a hot market, right? So I think we're back to levels pre-pandemic, which is not necessarily, you know, kind of an easy market. It's still very competitive. But it's certainly subsided a bit from what we were, you know, like nine, 12 months ago.

Okay, great. Thank you. I appreciate all the callers.

Thank you, Tyler. The next question comes from Diego Aragão from Goldman Sachs. Diego, go ahead.

Yes, good morning, everyone. Thanks for taking my question. First, congratulations on the quarter. Very nice print. I guess my first question is just a follow-up on the previous one about your pipeline of projects. You mentioned a good number of new clients additions this quarter, but are you seeing existing clients postponing projects or even like increasing the timeline of digital transformation projects given current macroeconomic environment? Thank you.

Thank you, Diego. Great to see you, man. Well, Diego, I think I mentioned that. I think there's a more meticulous process in the client side. They are looking careful what to do and what to start doing, what to stop doing. And basically, I think it's regarding this time to return. I think this is the main. point of decision. Are we investing on initiatives that we see we can get returns, concrete returns, in short cycles? I think this resonates a lot with CIT value prop of combining strategy, design, and the full stack software engineering to deliver short results, to show evidence that that initiative or that set of hypotheses are correct, are the right place to invest. So long sales cycle for sure for everyone across the board because of this meticulous analysis of what we should do or not due to this economic macro environment.

Thanks, Cesar. This makes a lot of sense. And I guess my second question is about M&A. You did a couple of transactions since the IPO last year. So I was wondering if you would consider doing further, you know, deals in 2023 or actually, you know, the coming year would be more focused on properly integrating these companies and extracting, let's say, the potential synergies you were seeing from those businesses. Thank you.

Amazing question, Diego. Basically, I think we are ending with Intersol. We are ending this, I would say, first wave of M&A using the proceeds of the IPO, as I mentioned. And basically, with that, we created an amazing footprint, especially in the regions in the Asia Pacific with the acquisition of Transpire in Australia, and also in Europe with the acquisition of SOMU in UK. And new vertical expertise, new capabilities with Intersol. in the USA in financial services. I think this is an amazing footprint for future growth too. Now, as you mentioned, our priority is to leverage this platform for organic growth. I think organic growth is our main value creation strategy, and M&A is just a way to speed up our presence, especially in new verticals and geographies. So you should expect now a lot of folks on leveraging these platforms, and we are very confident that these moves were a spectacular add to our footprint.

You're so clear, Cesar. Thank you.

My pleasure, Diego. Thanks, Diego. Our next question comes from Ashwin from Citi. Ashwin, please.

Thank you. My question is with regards to M&A and more about how much M&A you could be doing it at once. What's your bandwidth? to handle multiple M&A all at the same time in terms of integration and so on and so forth. And I guess the follow-up to that is, would we expect a slowdown in M&A given that you have so much on your plate right now?

Yeah, I can start and then Stanley can chime in. Ashwin, I think we have a I think an amazing strategy for leveraging the companies we acquire. I think probably you remember Cintiq has this entrepreneur organizational model based on growth units, independent growth units. By now we have 31 growth units around the world and every company we acquired, we integrate as a new growth unit. That gives us a lot of stability in this process of integrating because we keep the customer being supported by the same teams, by the same leaders and incrementally adding CIT global muscles to each one of these operations. I think this is, in the business perspective, this allows very low risk integration. Of course, we select carefully the targets, companies with a very solid customer base, with a very, I would say, near CI&T culture, leadership type, and so on. So I think this is basically criteria that allow us to execute the business integration in a very smooth way. And of course, there's a more careful process regarding back-off system process integration. It happens in a different timeline. So having said that, I think, as I mentioned, we are concluding an amazing first wave of M&A. I think M&A will be a long-term strategy for speed up our organic growth, but now we are totally focused on leveraging these new platforms. I don't know, Stanley, if you want to chime in and add some colors.

Yes, what I would add to that is that in parallel, going back to the question, how we can proceed parallel integration. Basically, when we started, for example, in Australia, we first sent executives on a greenfield mode, let's say, to understand the market, And later down the road, we made acquisition. And from there, we have both teams already, CINT and Transquire teams working together in that geography. The same thing happens in SOMO, same fashion. We went first in Greenfield mode, and then we have those executives, CINTs. together with Somos and so on. So the parallelism happens because we have teams, different geographies independently working in that growth unit approach that Cesar mentioned. And then, of course, those things grow. connect back to the back office, which is a different streamline. And we've been proceeding the many integrations in parallel as well. But of course, we have a preparation in parallel going on and that allow us to do the many acquisitions also in the systems and back office perspective. So mainly that's the approach.

Understood. Thank you. Thank you for that. The other question I have is with regards to just talking about these specific acquisitions themselves, and it was good to see the videos on Transpire and so on with the emphasis on culture. The question is, you know, if you could provide a little bit more granularity on, you know, where their clients are, the relative profitability, the relative billing rates, things like that for them and for InterSol. I would imagine InterSol being U.S. has higher billing rates. How should one think of the contribution of those financially? Sorry, if you covered it in different parts, I might have missed it, but you could go into that.

Sure, I will start this one too. I think this company's three acquisitions, especially Transpire, Somo and Intersol. These are companies that work basically with onshore teams, so you can expect higher price and also higher costs. And these companies normally operate in a range of the mid-teens in terms of EBITDA below CIT EBITDA. that is in the range of 20%. So and we expect that alone 123 years, we can add the near shark component, the our global technology perspective in this current client portfolio and bring their EBITDA to the levels of CIT. So this is part of the value creation we see for each one of these acquired companies. Of course, there's a lot of opportunities on cross-selling, on scale, these engagements and leverage and adding new capabilities, platforms, everything that has 7,000 company can provide to to to a customer Stanley do you want to add more colors on the specifics

Yeah, but I would add that that's the main objective when we go with this M&A strategy is to expand faster our capacity for organic growth. And of course, as we expand in the many different geographies, we will have a different blend of on-shoring, near-shoring, and that will be evolving throughout the time. we should expect that change in profile in the blend, let's say, and in both ways, because at the same time that we acquire some operations that they are heavily based on on shoring, we also want to add new shore capacity to that operation, and both worlds will happen, will evolve, let's say, together in parallel.

Understood.

Thank you.

Thank you for answering. We have a question from email here from Cesar Medina from Morgan Stanley. Can you please elaborate on the discussions you are now having for 2023 budget for growth, even if not a specific guide made so a big picture trends? Some of your peers in the industry have noted below 20% growth next year. Could this be the case for CIT, especially with what is happening on the fiscal front post-election?

I can get this one. Thank you, Medina. As I mentioned, we are still working on our 2023 budget and we would full disclosure our guidance in our next call. We have, we are really confident that after this solid 2022, we will really consider even considering the macro environment. Again, we have good visibility from our long-term clients. We have a good number of new clients and we mentioned 53 new clients onboarding in the last nine months. And this footprint of new M&A from the M&A, new geographies and verticals we can explore. So basically we are confident on our ability Of course, there is a lot of adaptation in our strategy, go-to-market strategy. I mentioned a lot of emphasis on speed, efficiency. There's always opportunity when there's a change in the macro environment, and it depends on your ability to adapt the way you are approaching each one of your clients, the kind of relationship you establish, and you can leverage opportunities even on a more cloudy macro environment. So we are still working on that, but we are confident we will provide another solid year.

Thank you, Cesar. So that concludes our Q&A session. Thank you all for attending our event today. I'll now invite Cesar to proceed with his closing remarks. Cesar.

Thank you, Eduardo, Stanley, Bruno, for joining me today. Thank you all for participating in another call. Again, I want to thank all CIN tiers for the amazing impact we are delivering as a team. and clients investors and partners for their continued support and of course a great fifa world cup for everyone stay well and i'm looking forward to seeing you all in a couple of months bye