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Date

Monday, May 11, 2026 at 4:30 p.m. ET

Call participants

  • Founder and Chief Executive Officer — Cesar Gon
  • Founder and President for North America and Europe — Bruno Guicardi
  • Chief Financial Officer — Stanley Rodrigues
  • Director of Investor Relations — Eduardo Galvan

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Takeaways

  • Revenue -- $136.6 million, a 23.2% year-over-year increase on an organic basis, and 15.5% growth at constant currency.
  • Adjusted EBITDA -- $20.8 million, representing a 15.2% margin and 6.3% year-over-year growth; FX-neutral margin was 17.4% ($22.2 million, 13.2% year-over-year growth).
  • Operating cash flow -- $13.5 million, equivalent to 65% of adjusted EBITDA.
  • Adjusted net profit -- $10.2 million, up 6.2%, with an adjusted net income margin of 7.5%.
  • Adjusted diluted EPS -- $0.80, an 11.8% year-over-year increase.
  • Headcount -- Over 8,000 professionals at quarter-end, including 6,600 average AI builders; headcount rose 13.3%, below constant-currency revenue growth.
  • New pricing models adoption -- 20% of new sales used value-based, output-based, or consumption-based engagement models, expected to drive progressive gross margin expansion.
  • Pipeline strength -- Value of deals in the sales pipeline up 30% compared to last year; all pipeline deals involve AI deployment.
  • Geographic revenue -- Latin America revenue grew 33%, North America 16%, and new markets 11%.
  • Top clients -- Top 10 accounts revenue expanded 18.9%, with $5 million to $10 million client cohort increasing from 15 to 18 clients.
  • Guidance update -- Upgraded full-year revenue guidance to $556 million–$575 million (13.5%-17.5% organic growth); Q2 revenue expected at $140 million, 19.5% reported and 13.9% constant-currency growth.
  • EBITDA margin outlook -- Full-year adjusted EBITDA margin guided to 17%-19%, with margin expansion anticipated in subsequent quarters as AI monetization accelerates.
  • Operational metrics -- Voluntary attrition at 10.3%, cited as lowest in recent history; Glassdoor score at 4.1, highest in peer group.
  • Diversity and ESG -- 52.2% of global workforce from underrepresented groups; over 100,000 people reached through funded social impact projects; 100% renewable energy in Brazilian operations.
  • AI-driven productivity -- AgenTic SDLC cited for enabling 5x to 20x productivity improvements for clients.

Summary

Management increased fiscal-year revenue guidance after reporting organic double-digit growth and a broad-based acceleration in AI-driven engagements across all geographies and verticals. The first mention of CI&T (CINT +2.83%) in this summary highlights the company's expansion of value-based and outcome-based pricing models, which began tangibly affecting new business, with approximately one-fifth of new sales under these models. Pipeline conversion improved, fueled by a 30% increase in AI-related deal value and continued penetration in large enterprise accounts. CFO Stanley Rodrigues highlighted that FX and Brazilian payroll taxes weighed on first-quarter margins but are expected to moderate, with sequential margin expansion guided as value-based models reach greater scale. The company formally launched its 2025 Global ESG Report, underscoring material workforce diversity and environmental progress, aligned with the UN Global Compact.

  • Direct commentary confirmed that value-based and consumption-driven models could improve contribution margin by 3–15 percentage points on applicable contracts as adoption grows.
  • Management specified that, with 18 months as the engagement renewal cycle, new pricing models are poised to roll through the revenue base at an accelerating pace.
  • Latin America led geographic performance, but management emphasized growth balance among major accounts and regions, limiting concentration risk.
  • "We grew our $5 million to $10 million client cohort from 15 to 18 clients in the quarter," indicating successful land-and-expand execution.
  • The company highlighted expanded cloud and AI partnerships, including recent recognitions by Fast Company and Google Cloud, as strategic validation of its model transformation.

Industry glossary

  • AgenTic SDLC: CI&T's proprietary AI-integrated software development lifecycle framework, designed to accelerate enterprise productivity and decision-making in software delivery.
  • Agent computing units: Consumption-based pricing metric reflecting usage of CI&T's proprietary AI-enabled intellectual property within client engagements.

Full Conference Call Transcript

Unknown Speaker: AI does not fix your SDLC. AI has reduced the cost of generating code to near zero. But the bottleneck did not disappear. It moved. From writing code to deciding whether code is ready to move. We introduced AgenTic SDLC by drawing on our deep knowledge of software engineering and operational efficiency. This framework represents a fundamental shift in software delivery, prioritizing decision-making over task completion to maintain momentum. Decisions are propagated through an orchestration layer that connects humans, agents, tools, and shared context. The transformation unfolds across three stages of maturity: Augmentation, where AI accelerates individual tasks; Coordination, where agents connect across stages; and Autonomy, where the life cycle itself is redesigned.

Reported gains of 2, 5, and up to 20 times, not from faster tasks, but from a system that stops waiting. The organizations that lead in this period will not be those that generate the most code, but those that orchestrate the system best with trust and decision criteria. Explore the full paper online. Good afternoon.

Eduardo Galvan: And thank you for joining us for CI&T Inc first quarter of 2026 earnings call. I am Eduardo Galvan, Director of Investor Relations. Joining me today to discuss our results and strategic milestones are Cesar Gon, our founder and CEO; Bruno Guicardi, founder and president for North America and Europe; and Stanley Rodrigues, our CFO. Before we begin, I would like to remind you that our remarks today will include forward-looking statements. These statements, including our business outlook, are based on management’s current expectations and are subject to risks and uncertainties that could cause actual results to differ materially.

We caution you not to place undue reliance on these forward-looking statements as they are valid only as of the date when made. Additionally, we will discuss certain non-GAAP financial measures. We believe these provide a more comprehensive view of our underlying operational performance. For a full reconciliation of these measures to the most directly comparable metrics, please refer to the tables in our earnings release. Today’s session is being recorded and all participants are currently in a listen-only mode. Following our presentation, we will host a Q&A session. To participate, please submit your question via email to [email protected].

The full presentation deck is available on our Investor Relations website, and a replay of this call will be posted shortly after we conclude. With that, I am pleased to hand the floor over to our founder and CEO, Cesar Gon.

Cesar Gon: Thank you, Eduardo, and good day, everyone. A year ago, I said the future of business is technology, and the future of technology is business. Six consecutive quarters of double-digit organic growth tell me that bet was right. What is changing is the kind of partner companies are looking for: not a traditional horizontal service firm, but what we are choosing to call a tech-integrated business solutions partner. We continue to advance two distinct AI-driven growth vectors for CI&T Inc: AI deployment, which expands revenue through IP-based solutions and AI adoption engagements; and AI monetization, where we have expanded margins by evolving our pricing models to capture a greater share of the productivity gains and business value created by AI.

2025 was a very strong year for AI deployment, and this trend has only strengthened in 2026. At the same time, 2026 marks the year when our AI monetization efforts are becoming more tangible. In Q1 2026, 20% of new sales were already based on new pricing models. We expect these models to contribute to gross margin expansion over the coming quarters as adoption continues to accelerate. By combining strategy, AI-native execution with AgenTic SDLC, and IP-based solutions, we are positioning CI&T Inc to help lead the next decade of business reinvention. Turning to our financial performance, the first quarter of 2026 was a period of significant scale and sustained momentum.

We achieved record revenue of $136.6 million, representing 23.2% year-over-year organic growth. This outperformance is notably broad-based with robust demand across all core geographies and a diversified footprint spanning our key industry verticals. Profitability remained a core strength of our model, with adjusted EBITDA reaching $20.8 million, representing a 15.2% margin. On an FX-neutral basis, this would be equivalent to an EBITDA margin of 17.4%. This performance reflects our ability to continue investing in our AI growth while maintaining a disciplined operational profile. Furthermore, our business continues to demonstrate high-quality cash conversion, with $13.5 million in operating cash flow this quarter, equivalent to 65% of adjusted EBITDA.

The first quarter of 2026 marked our sixth consecutive quarter of double-digit organic growth, and this growth remains fully organic. This consistency is not accidental. It reflects a structural shift in client demand and CI&T Inc’s ability to capture it. We are now seeing a clear acceleration of AI deployment. Clients are moving beyond experimentation and beginning to rebuild their technology foundations, operating models, and business processes around AI. They need partners capable of connecting strategy, execution, and measurable outcomes in the complex reality of large enterprise environments. This is where CI&T Inc is increasingly differentiated.

Our proprietary IP, AI-native delivery capabilities, and CI&T Flow are helping us convert this demand into large, higher-quality engagements, both with new clients and within existing accounts. The case studies that follow show how this AI deployment momentum is translating into tangible business outcomes.

Unknown Speaker: One of the world’s largest health care companies—pharmaceuticals, medical devices, global scale. The challenge was simple to state and hard to deliver: unlock value fast without growing the team, without expanding the budget. We did not add people. We did not increase spend. We changed the model. The introduction of CI&T Inc’s AgenTic SDLC marked a turning point for the client. AI-based agents plus human-in-the-loop equals sharper judgment, excellence at every step. Now, CI&T Inc’s AgenTic SDLC is already delivering five times faster AI designs and code. Humans orchestrate and validate. Next, 20 times faster. Not a pilot, a production system.

This is the power of the AgenTic SDLC—software delivery on a new cadence—running inside one of the world’s largest health care companies. Built with us. The future starts Monday.

Unknown Speaker: In digital credit, growth is mandatory. Scaling with consistency—that is the real interest rate. Jato migrated to Flutter, launched on iOS, and wired AI into the development workflow with CI&T Inc. Productivity up 87%, development time down 44%, cycle time 15 days flat. AI is not a feature Jato added. It is the new credit line running through the code. AI-first happens where speed, scale, and judgment finally move together. Udokus rewrote how its learning hubs run. Software development through AI allows teams to move beyond manual tasks and focus on higher-level strategic thinking. AI workflows wired in. Audit-ready. Always on. A feature once scoped for a month, shipped in a week. Productivity did not inch up.

It multiplied—five times during the initial phase, reaching seven times in the subsequent wave. Because in education, the best lessons are not taught; they are engineered. With the right partner.

Unknown Speaker: We are recognized as a sustainable supplier by Porto. This is the result of real collaboration and shared accountability, strengthening an entire ecosystem, not just a business relationship. Our ESG journey is continuous and firmly aligned with the UN Global Compact. At CI&T Inc, sustainability is not a future ambition. It is a decision we make today.

Unknown Speaker: AI is already in the checkout line. But according to our latest retail tech reality check, most consumers are not yet impressed by the experience. To explore the story behind the data, Melissa Minkow, our Global Director of Strategy and Insights, sat down with the UK’s leading retail press in London, including the BBC, Retail Week, and City A.M., to unpack the findings. The takeaway? AI is not on the horizon. It is already in the cart. But for retailers, the real work of winning over the customer has only just begun.

Unknown Speaker: We are around the clock across time zones with the partners shaping what comes next. São Paulo, Adobe Partner Day—aligning priorities for the year ahead. Still in São Paulo, Adobe AI Forum—AI in action with our clients side by side. Many places in Brazil—industry conversations driving data and AI forward. Las Vegas—Databricks partner kickoff. Connecting globally. With AWS Kickoff 2026—GenAI workshops, working-backwards sessions, from strategy to execution. With Microsoft AI Tour—summits, training, scaling AI across markets. Different places, same direction. Innovation only matters when it delivers real impact. That is what the Fast Company Most Innovative Companies ranking recognizes—organizations that turn strategy into execution. We are proud to be among them. Let us keep talking about recognitions.

We are also proud to be named the 2026 Google Cloud Partner of the Year for Databases in Latin America, recognizing how we mix strategy, data engineering, and analytics to make that transformation real. We will always be connecting AI, data, and engineering to real business challenges.

Unknown Speaker: Making it work where it matters most—inside our clients’ operations.

Cesar Gon: These cases serve as empirical evidence of how our AgenTic SDLC is fundamentally resetting the baseline for enterprise productivity and speed to value. I will now hand over to Bruno to discuss how we are scaling this hyperproductivity across our global delivery model and our evolved talent strategy.

Bruno Guicardi: Thanks, Cesar. Good afternoon, everyone. I am excited to share our operational and talent progress for this quarter. We ended the first quarter of 2026 with over 8 thousand professionals, including an average of 6.6 thousand AI builders. While our headcount increased 13.3% year over year, this remained below our 15.5% revenue growth at constant currency. This delta has already begun lifting our revenue per professional, and we expect it to widen as AI monetization scales. Value-based pricing better captures more of the value we create per engagement, strengthening our unit economics. We continue to grow the team. As Cesar noted, we have pivoted from technology execution to strategic AI deployment. Our talent is no longer merely building code.

They are curators of AI, leveraging scientific flow and the AgenTic SDLC to collapse development times and deliver hyperproductivity. This shift is only possible because of our culture of continuous adaptation. We ended the quarter with a 4.1 Glassdoor score, the highest among our peer group, and have been recognized by Great Place to Work for 19 consecutive years. Our voluntary attrition remains at a healthy 10.3%, the lowest level in our recent history. In an era where AI is redefining technical careers, our industry-leading retention proves that our people feel empowered by these tools, not replaced by them.

Our AI builders are the engine of our innovation, and their ability to orchestrate complex AI agents is the fundamental differentiator for CI&T Inc in the global market. I am proud to announce the launch of our 2025 Global ESG Report this quarter, reaffirming our commitment to the UN Global Compact. Our culture remains a primary competitive advantage, and 52.2% of our global workforce is from underrepresented groups. The diversity of perspective is what allows us to navigate the ethical complexity of AI responsibly. It is not separate from the business; it is why clients trust us with the work.

The report also covers our social impact—over 100 thousand people reached through funded projects—alongside governance and environmental milestones, including the Golden Seal of the Brazil GHG Protocol and 100% renewable energy across our Brazilian operations. I invite you to explore the full report published on our website. Now over to Stanley to guide us through our financial performance.

Stanley Rodrigues: Thank you, Bruno, and good afternoon, everyone. Let me walk you through our financial performance for the first quarter of 2026. We achieved $136.6 million in net revenue, representing a robust 23.2% growth compared to the same period last year, fully organic. On a constant currency basis, revenue grew 15.5% year over year. I want to highlight that this performance exceeded our guidance and surpassed current analyst estimates. This outperformance is underpinned by exceptional momentum in our go-to-market execution. Throughout the quarter, we observed a significant expansion in our sales pipeline and an improved conversion rate—the direct result of intentional sales initiatives and the tangible impact our AI deployment is delivering for our clients.

What excites us most is the underlying quality and breadth of this performance. From a geographic perspective, Latin America led the acceleration with 33% growth, while North America delivered a solid increase of 16%, and new markets grew 11% year over year. We achieved an 18.9% expansion within our top 10 accounts, yet our growth remains healthily distributed. This resilience was visible across nearly all industry verticals, which grew at double digits, with our consumer goods segment remaining stable. This broad-based performance confirms that our AI deployment is not a localized success; it is a global catalyst driving deeper penetration across all regions and industries we serve. This chart illustrates our land-and-expand strategy in action.

We grew our $5 million to $10 million client cohort from 15 to 18 clients in the quarter, a compounding effect of our ability to scale wallet share through AI-driven impact. Our performance is fueled by exceptional go-to-market execution. We observed significant pipeline expansion and improved conversion rates this quarter—the direct result of intentional sales initiatives and the tangible return on investment our AI deployment provides. This strength creates a highly predictable and resilient revenue base as we deepen these strategic partnerships. In the first quarter of 2026, our adjusted EBITDA reached $20.8 million, a 6.3% increase year over year, resulting in a 15.2% margin.

It is important to note that this margin reflects two specific headwinds: unfavorable foreign exchange comparisons and the impact of increased Brazilian payroll taxes. To provide a clearer view of our operational performance, if we exclude the FX impact, our first quarter 2026 EBITDA would have reached $22.2 million, equivalent to a 17.4% margin and a robust 13.2% year-over-year growth. This FX impact was more pronounced in the first quarter due to the year-over-year Brazilian real/U.S. dollar comparison base and is expected to attenuate over the coming quarters. We remain focused on ensuring that the hyperproductivity we are engineering today becomes the permanent foundation for long-term sustainable profitability.

As Cesar mentioned, we expect our new engagement models to contribute to margin expansion over the coming quarters, as adoption continues to accelerate and we capture a greater share of the value we create. Moving to our bottom line, adjusted profit reached $10.2 million in the first quarter of 2026. This represents a 6.2% increase compared to the same period last year, resulting in an adjusted net income margin of 7.5%. Most importantly, our adjusted diluted earnings per share were $0.80, representing a robust 11.8% increase over the first quarter of 2025.

This double-digit growth in earnings per share, surpassing our net profit growth, is a direct result of our disciplined capital allocation strategy and the increasing operating leverage within our AI-native platform. I will now turn the call back to Cesar to discuss our business outlook and the strategic path forward for the remainder of 2026.

Cesar Gon: Thank you, Stanley. For the second quarter of 2026, we expect revenue of at least $140 million, representing 19.5% growth year over year, or 13.9% at constant currency. Based on our strong first quarter performance and the quality of our current pipeline, we are increasing our full-year 2026 revenue guidance to a range of $556 million to $575 million. This implies organic growth of 13.5% to 17.5%, with a midpoint of 15.5%. Our revised growth outlook includes a positive FX effect of approximately 350 basis points, which is 50 basis points higher than our previous guidance. Effectively, of our 150 basis points increase to our revenue guidance, 100 basis points are driven by pure organic momentum and improved pipeline conversion.

Our updated guidance reflects the continued strength of our first AI-driven growth vector, AI deployment, which is fueling revenue expansion through IP-based solutions and AI adoption engagements, combined with our well-oiled go-to-market strategy. In addition, we estimate our adjusted EBITDA margin to be in the range of 17% to 19%. We project margin expansion to build sequentially throughout the year, supported by our second AI-driven growth vector, AI monetization, as the adoption of new pricing models accelerates and enables us to incrementally capture a greater share of the productivity gains and business value created by AI. With that, we are ready to begin the Q&A session. Thank you.

Operator: We will now open the call for questions.

Eduardo Galvan: I will announce each participant’s name. Once you hear your name, please unmute your line and ask your question. Then when you are done, please mute your line.

Operator: The first question comes from Gustavo Farias from UBS. Gustavo, please go ahead.

Gustavo Farias: Everyone, thanks for taking my questions. Two on my end. First, on the results: could you provide color on the current pipeline of projects and the mix among the types of contracts—time and materials, outcome-based, fixed price—and how this has been evolving and the margin profile you have been encountering in each of them? My second question is related to margins. We have seen the margin a little bit below our numbers and consensus numbers. Of course, you explained very clearly the main drivers. Just to double check here, how much of that was already expected by the previous and current margin guidance?

And is it fair to assume margins based on Q1 results could be brought toward the lower end of this 17% to 19% range? That is my second question. Thank you, guys.

Cesar Gon: Thanks, Gustavo. I can handle the first one, and then Stanley can get the second one. Regarding pricing models, as planned, we are now advancing what we are calling the AI monetization effort that basically is an effort to synchronize AI deployment with the evolution of our pricing models to be more value-based and, of course, give us the opportunity to capture more margin from the efficiencies and impact we are generating. We disclosed for the first time this evolution by giving the data point that 20% of all new sales in the first quarter were already based on these value-based models.

Value-based models for us are a combination of output-based with price-per-consumption—or what we call agent computing units—when we sell IP. In that 20% we disclosed, it is a combination and mix of these different pricing models. We believe the future will really be in a hybrid model where we combine, depending on the situation and scenario, all these alternatives, with the goal to provide more flexibility to our clients and skin in the game from CI&T Inc regarding our ability to leverage value from the AI deployment and also, of course, capture more of the share of the impact we are generating. Our business model is very current, so we have long-term contracts.

That is why, quarter over quarter, you will see a visible, tangible increment in our gross margin as a result of this move toward new pricing models, but we will also keep part of our revenue still based on time and materials. Even time and materials—if you see what is happening in the industry—time and materials is being rebranded as forward engineering deployment. So there is a new set of opportunities even for time and materials engagements to reprice based on deep AI competence. All good moves, vectors in our favor, and I see a very consistent strategy for CI&T Inc on these two vectors: AI deployment combined with disciplined AI monetization.

Stanley, if you could address specifically the second question from Gustavo.

Stanley Rodrigues: Yes, Gustavo, thank you for the question about margins. We are maintaining our guidance of EBITDA in the range of 17% to 19%. What is built into that guidance? First, structural characteristics of our business: seasonality—we have higher margins toward the second half of the year. We also have operating leverage going on for the last years, and we will continue to see that throughout 2026. On top of that, we have the margin expansion out of AI monetization through new engagement models. All of that combined is compensating for the real appreciation, which is a headwind to the margins, and that is already within this 17% to 19% guidance. In absolute terms, EBITDA will increase in comparison to 2025.

So the question is more toward the margin effect on revenue mix and FX.

Gustavo Farias: That is very helpful. Thank you, guys.

Cesar Gon: Thanks, Gustavo.

Operator: Our next question comes from Puneet Jain from JPMorgan. Hi, Puneet.

Puneet Jain: Hey, thanks for taking my question. I also have a question on this new AI-based delivery model, AgenTic SDLC. Assuming some of those contracts stay as time and materials, how do you integrate that token cost and the overall AI portion of cost in your delivery structure? And how does the margin profile of some of those contracts compare with your people-based models?

Cesar Gon: Thanks, Puneet. Basically, in terms of pricing, even in time and materials engagements, we continue to see a very rational price environment and a lot of openness from our clients to discuss new pricing models and to incorporate new opportunities regarding AI. We see a lot of opportunity. The low-hanging fruit is to adjust, since we are now leading with a very superior approach on AI deployment; we can accommodate any additional cost in our pricing model. But the most strategic part is moving from time and materials to new output-based, outcome-based, and consumption-based models.

As demand is huge and the eagerness of our clients to leverage AI benefits is increasing, we need to synchronize everything—and it is what we do well. We are very happy with what we have done in previous quarters regarding AI deployment and the speed at which we are now advancing AI efforts. It is about our ability to demonstrate value. If you are able to demonstrate the impact you can generate with AI for our clients, they respond accordingly in terms of adjusting the model in the right direction.

Bruno Guicardi: If I can complement, Puneet, the adjustment is not a gradual, incremental one. We are talking about 3x, 5x, 7x. When you create that type of impact, to Cesar’s point, clients are open to having more of that and expanding. That is how we have been growing—by increasing wallet share within clients, getting more space, and making those relationships closer. The engagement models—they are open to more of that. It is a win-win conversation.

Puneet Jain: Appreciate that. And are you seeing any impact from geopolitical uncertainty—the war in the Middle East—on your clients’ decision-making at all? Any verticals anywhere where you might be seeing signs of slowdown in the second quarter compared to Q1?

Bruno Guicardi: Not really. So far, the dynamics of this growth and the growth that we are guiding are based on the dynamic within our clients and our ability to create more value than our competitors, winning wallet share and growing with them. They are big, stable companies, leaders in their markets. They are solid companies. They are growing. They are doing well. So if we do our part—create great value for them and stay ahead of the pack, which we think we are at this point—we have to keep ahead of the pack. We do not think the macro will impact a ton.

Puneet Jain: Okay. Thank you.

Operator: Thanks, Puneet. Our next question comes from an analyst from Wedbush. Please go ahead.

Analyst: Hey, thanks, guys. Congrats on the quarter, and thanks for taking the questions. I have two questions, one on value-based pricing and one on headcount growth. Specifically for the value-based pricing, you mentioned that 20% of new sales is coming from this approach. Do you have any sort of long-term gauge or target for value-based pricing, and are you expecting to get a lot of new customers onto this approach? And then on headcount, especially when you are starting to see over 80% of your headcount leveraging AI and becoming curators of AI as you described, is that going to lead to any headcount reduction in the near term or long term that we should take into account?

Cesar Gon: I can get the first one—thank you for the question. We see this change happening over a horizon of maybe 18 months, as a natural evolution as new sales become relevant in terms of revenue quarter over quarter. Gradually, you are going to see the effect in our gross margin where you can clearly see the difference in the value we are capturing from the engagements. Another point: it is not just pricing models. Our offerings are evolving to generate much more impact to our clients, which gives us a lot of flexibility.

As we see the momentum of AI deployment increase and the way we are well positioned, we see room to accommodate CI&T Inc in a better shape regarding value capture—quarter by quarter—following the increased impact we are generating for our clients. Impact around horizontal efficiency—data, app modernization, and so on—and direct AI impact with new use cases that are emerging for every vertical and segment. A lot of opportunities and we are well positioned to capture them. Regarding our workforce, Bruno can address that.

Bruno Guicardi: Thank you for the question. Even if the total addressable market reduces in size—which we do not necessarily expect—it would not reduce by a lot, and it may not reduce at all. Our ambition is to be a leader in this new industry of AI builders. If we accomplish that—and our plan is to be aggressively ahead of the curve—we will capture share and be a winner in this new market. Being a winner here means we will continue to grow by revenue and by headcount. That is the ambition: win in this new game, keep giving opportunity for our people to become leading professionals in their industry, and create value for our clients.

We do not foresee headcount reduction in that scenario.

Eduardo Galvan: Just to add to that, a good way to look at this as we evolve on these new engagement models is higher revenue per headcount. That is the best way to see the trend going forward—growing headcount and growing revenue per headcount as well. That should be a good indicator to track as we evolve in these new models.

Cesar Gon: Let me add one thing that I think is important. Looking back, we did an amazing job in the past three years. We really introduced AI across CI&T Inc. We fostered adoption. We reskilled our whole team around artificial intelligence. And we also turned every single CI&T Inc engagement into an AI engagement. Now we have AI builders—that is the most important talent to make AI deployment feasible. It was a very good strategy not to create a separate business unit for AI services. We said, let us look at our core offerings and redesign around AI—three years ago. Now we are leveraging the results of these bets.

Analyst: Got it. Thanks, guys.

Operator: Thank you. Our next question comes from Brian Bergen from TD Cowen. Hey, Brian, your line is open.

Brian Bergen: Hey, guys. Good afternoon. Thank you. I wanted to ask about this contract structure evolution. Is this across industries and across the portfolio? Can you talk about the nature of the clients that are going along with this and the characteristics that those clients have that you could learn from to better cross-pollinate across the entire portfolio?

Cesar Gon: Thanks, Brian. Great to see you. Part of the evolution of the pricing models is combining with our IP-based offerings. As more IP is on the table in a deal, it becomes more feasible to introduce new commercial models. We are combining, and as we are working hard around our IP-based solutions, by now we have a solid set of assets that allow us to really foster our AI monetization through the new model. IP is an important foundation of our strategy. If I summarize our strategy, we have two growth vectors—AI deployment and AI monetization—and four pillars: IP-based offerings, commercial models, data (it is incredible what we are doing around data), and partnerships with the hyperscalers.

These four pillars are fostering our growth vectors in an amazing way. Our job is to synchronize all these momentums and capture the growth and the value we deserve by the impact we are generating.

Brian Bergen: As it relates to your large clients—you had another good performance in top one, top 10—maybe dig in on your visibility to continue momentum in those accounts.

Cesar Gon: This quarter we reported growth in all verticals and cohorts of clients—top one, top 10, ex-top one, ex-top 10—so it is a very broad, good momentum regarding AI deployment. We stay focused on the kind of client that we believe is the hotspot for CI&T Inc: large, complex organizations that are really looking for ways to leverage AI impact. Across regions, we grew in Latin America and North America, and even new markets had a good response this last quarter. We expect the momentum will continue in all verticals and regions.

Brian Bergen: Very good. Thank you.

Cesar Gon: Thanks, Brian.

Operator: Our next question comes from Luke Morrison from Canaccord. Hey, Luke, please go ahead.

Luke Morrison: Hey, guys. Good to see you. Thanks for taking the question. One on gross margins: they compressed quite a bit in the quarter. Can you help us unpack what is driving that—whether it is entirely FX and payroll tax impact—or if there is an element of AI spend and AI investment that you need to scale into? And how should we be thinking about modeling gross margins for the rest of the year and onward?

And of that 20% of new sales on the new pricing models, can you give us a sense of what gross margins look like on those engagements, what they can scale to over time, and how that can impact the overall gross margin profile of the business over a two- to five-year period?

Stanley Rodrigues: Thank you for the question. Let us unpack it. First, by far, it is the FX effect—more than 200 basis points only in that aspect. We presented in the slides an adjusted-by-current-currency equivalent. You also have to bear in mind seasonality: every first quarter of the year we have a load of salary adjustments that will be compensated throughout the year by contract adjustments and so on. So we have the combination of a structural aspect and the specific FX effect. Those are the main aspects for the first quarter.

As for modeling the next quarters, we have seasonality (higher working days in the next quarters versus the first quarter), operating leverage as we grow the business, and the monetization of the new engagement models playing an important role throughout the next quarters. I would not suggest modeling anything different than what we guided in terms of EBITDA. That is why we have a range: the top reflects what we envision in the pipeline, the midpoint is more conservative, and the low end reflects macro effects to be more conservative.

Cesar Gon: Let me be a little more specific on the new pricing models. The new pricing models can increase—depending on the context of the engagement—contribution margin by 3 to 4 percentage points up to 10 to 15 percentage points. That is why we see this as a pillar in our strategy to capture part of the value. This is only possible because we are not delivering the same kind of impact; we are delivering much higher impact. If you try to discuss pricing while delivering the same value, it will not work. But we are delivering a different level of impact, and this has allowed us to move toward more powerful pricing models.

Another thing: if you look at the numbers we just released, combining our organic growth of 23.2% with our adjusted EBITDA margin of 15.2%, we reached 38.4%—nearly back to the famous Rule of 40. Looking ahead, from next quarter, you will see better gross margins as a result of the fundamental seasonality and also the beginning of the impact of the new pricing models. This will allow us to increase our sales investments, which is the strategy to fuel high growth and a strong bottom line in the long term. This is the piece of the puzzle we are handling now in a very good way.

Luke Morrison: Excellent color. Thank you very much.

Operator: Thank you, Luke. Our next question comes from Cesar Medina from Morgan Stanley. Please go ahead.

Cesar Medina: Hey, congratulations on the results—quite strong and broad-based. Twofold question. One—sorry to keep pressing on the new pricing mechanism—but the 20% is of new sales, not total revenues of the quarter. If I look at your pipeline—the one you are building, not just for the second quarter but forward—how prevalent is that new sales mechanism? And second, on the full-year guidance: if I do the math in terms of constant currency for first quarter and second quarter, that suggests that in the second half of the year you are going to have more muted growth. Is that the right way to see it?

Also, pursuant to Stanley’s margin comments, if you are reinvesting in growth, on a gross margin basis for these new engagements, are these margins closer to software?

Cesar Gon: Very good, Medina. Thank you for the questions. First, as you know, we have a lot of recurring long-term revenue, but in a timeline of 18 months, everything that we will be doing will be new sales—meaning it takes basically 18 months to renew 100% of the engagements at CI&T Inc. On the pipeline, it is healthy. The data point now is that the number of deals in terms of value is 30% higher than the same period last year, and 100% relate to AI deployment. If you combine these data points, you see how we are growing AI deployment and evolving our AI monetization along the next quarters.

On your gross margin question, we are building a business with significantly higher gross margins but also with different elements in the P&L. It is moving to a more scalable and profitable business model, gradually as we deploy these new models. The reference to reinvesting in sales is because we see a huge opportunity. If the market continues to move in our direction, as we are seeing, we have the opportunity to really accelerate our expansion, and this will require broader investments around go-to-market and sales.

On the full-year guidance, we detailed that we increased our revenue outlook by 150 basis points: 100 basis points are a pure reflection of demand and pipeline, and 50 basis points are an FX tailwind. As we have done for six consecutive quarters, we intend to execute and do better as we win the AI deployment game.

Eduardo Galvan: Thank you, Medina. That concludes our Q&A session. I will now invite Cesar Gon to proceed with his closing remarks.

Cesar Gon: Thanks, Galvan. Thank you, Bruno, Stanley, Eduardo, again. Thank you all for joining us today, and more especially, I want to thank all CI&T Inc’ers around the world—congratulations for one more record quarter. Let us keep pushing. And a special thank you as well to our clients for choosing CI&T Inc in this extraordinary moment of AI deployment and AI-driven innovation. Stay well. See you soon.