CI&T (CINT) Q3 2026 Earnings Call Transcript

DATE

Wednesday, Nov. 11, 2026

CALL PARTICIPANTS

• Chief Executive Officer – Cesar Gon
• President – Bruno Guicardi
• Chief Financial Officer – Stanley Rodrigues
• Investor Relations – Eduardo Galvao

TAKEAWAYS

• Revenue — $146.3 million, up 14.9% year over year or 11.2% at constant currency, exceeding management’s prior outlook of at least $145.7 million.
• Adjusted Gross Margin — 36.6%, representing an expansion of 270 basis points year over year due to AI productivity and the shift toward value-based commercial models.
• Adjusted EBITDA — $22.6 million, an increase of 19.1% from the second quarter, with the margin expanding to 15.5%.
• Adjusted Diluted EPS — $0.09, representing 4.5% year-over-year growth driven by higher net profit and a reduced share count.
• Revenue per AI Builder — $82,500 on a last-12-month basis, up 10% year over year as the company delivers more output with a stable head count.
• Latin America Revenue — 20% year-over-year growth, making it the fastest-growing geographical region for the company in the third quarter.
• Technology and Telecom Revenue — 40.2% year-over-year growth, leading all industry verticals in performance during the quarter.
• Financial Services Revenue — 26.1% year-over-year growth, maintaining its position as the company’s largest vertical.
• Revenue from Clients Outside the Top 10 — 17.1% year-over-year growth, marking the third consecutive quarter that the broader client base grew faster than the 10 largest accounts.
• Value-Based Engagements — 40% of new engagements signed in the third quarter, an increase from 30% in the first half of the year.
• Selling Expenses — 14% of revenue, up from 11.9% in the second quarter, due to structural expansion of the commercial organization and agentic SDLC initiatives.
• General and Administrative Expenses — 10.2% of revenue, down from 11% one year ago, delivering operating leverage across the company structure.
• Operating Cash Flow — $22.4 million, which represents nearly 100% of adjusted EBITDA generated during the quarter.
• Share Repurchases — $2.9 million during the quarter and $9.1 million year-to-date, resulting in a 2.4% reduction in weighted average diluted shares year over year.
• Fourth Quarter Revenue Guidance — $142.3 million to $152.0 million, implying 9.6% growth at the midpoint as management accounts for macro uncertainty and currency volatility.
• Full Year Revenue Guidance — $568 million to $578 million, representing organic growth of 16% to 18% with a positive currency impact of approximately 450 basis points.
• Full Year Adjusted EBITDA Margin Guidance — 15% to 17%, maintained despite headwinds from currency and payroll tax changes in Brazil.
• Sales Pipeline — 50% larger than one year ago, with 70% of the current pipeline originating from the existing client base.
• Partnership Attachment — 20% of 2026 sales involved collaboration with partners, up from previous years following new frontier lab integrations.
• Voluntary Attrition — 9.9%, which management identified as being among the lowest levels in the history of the company.
• Head Count Growth — 1.8% year over year, significantly lower than the 14.9% revenue growth, reflecting the decoupling of revenue from staffing levels through AI.

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RISKS

• CFO Rodrigues warned that the “payroll tax resumption in Brazil” is currently a “headwind” impacting the company’s margin profile.
• Cesar Gon noted that “macro uncertainty and FX volatility” influenced the width of the company’s fourth quarter revenue guidance range.
• Cesar Gon indicated that while the sales pipeline is at record levels, the exact timing of when that demand converts into revenue remains a variable for the fourth quarter.

SUMMARY

CI&T Inc. (CINT +3.42%) reported record quarterly revenue and expanded its gross margin through a strategic shift toward value-based commercial models and AI-driven delivery. Management reported that revenue growth significantly decoupled from head count growth, as the revenue per AI builder reached a new high. The company indicated that its sales pipeline has expanded, driven by demand for AI-enabled services and business transformation projects. While macro uncertainty and currency volatility influenced the fourth quarter outlook, the company raised the low end of its full year revenue guidance.

• Management reported that 75% of new sales to new clients are now utilizing value-based commercial models rather than traditional time-and-material structures.
• Bruno Guicardi stated that the company’s new commercial models allow it to be paid for what it delivers rather than for the hours billed.
• The company reached the Preferred tier in the Claude Partner Network Services Track within three months of joining the network.
• Cesar Gon reported that AI-enabled services, specifically agentic SDLC, now account for roughly half of the company’s total sales.
• The company became a launch partner in the SpaceX Super Intelligence Partner Network, adding the Grok model to its orchestration platform.
• CFO Rodrigues indicated that selling expenses as a percentage of revenue are expected to decline from third quarter levels following the completion of specific sales engine investments.
• Cesar Gon observed that AI is reducing the risk associated with legacy modernization by enabling faster and more cost-effective interpretation of existing business rules.

INDUSTRY GLOSSARY

• Agentic SDLC: An AI-augmented Software Development Life Cycle that uses autonomous agents to automate or enhance coding and testing processes.
• CI&T FLOW: The company’s proprietary platform for orchestrating AI models and software development workflows.
• Decision Intelligence: A system that uses AI to turn predictive data into automated or human-approved operational actions.
• Value-Based Commercial Model: A pricing structure where the company is paid based on specific outputs or outcomes instead of the number of hours worked.
• FX-Neutral: A financial measurement that removes the impact of foreign exchange rate fluctuations to evaluate underlying business performance.
• Claude: A family of large language models developed by Anthropic and integrated into CI&T’s service offerings.
• Grok: An AI model developed by xAI and recently added to CI&T’s orchestration capabilities.
• Multimodel: A strategy that allows for the simultaneous use and switching between different AI models to optimize for performance and cost.

Full Conference Call Transcript

Cesar Gon: [Audio Gap] Bruno will now show you what this means in productivity: revenue growing faster than our team. Bruno, I hand it over to you.

Bruno Guicardi: Thank you, Cesar. Good afternoon, everyone. The clearest measure of our new model is revenue per AI builder. On a last-12-month basis, it reached $82,500, up 10% year-over-year, an acceleration from 7% last quarter. What drives it is simple: we closed the third quarter with about the same number of AI builders as a year ago, while revenue grew 14.9%, as our people now deliver more with AI. Our revenue no longer moves one-to-one with head count. With our new commercial models, we are paid for what we deliver, not for the hours we bill, and that’s what lifts our gross margin. And the team is stable. Voluntary attrition was 9.9%, among the lowest in our history.

Let me give you an example of one of our offerings that turns AI into measurable results: Decision Intelligence. Our clients have built strong data and analytics foundations. Analytics tells them what will probably happen; Decision Intelligence takes the next step; it turns that prediction into a decision made at the right time; it closes the loop; a model detects a signal; business rules shape the recommendation; a person approves; and the action runs directly into the client’s operational systems. Every outcome feeds the next decision. And people stay in command. Clients start with a human approving every decision and give the system more autonomy only as trust builds, with every step auditable.

To deliver outcomes like this, clients need the best model for each problem, not a model their provider needs to sell. That’s why we are multimodel by design and why the model builders want to work with us. Three months after joining the Claude Partner Network, we reached the Preferred tier in the Services Track. That tier is earned with Certified Delivery Team, Claude use cases delivered for clients, and public customer references. We have more than 50 major projects underway with Claude across software engineering, customer service and user experience for global clients such as Stretto and Vanguard. And we use it ourselves first.

Claude Code runs extensively within CI&T FLOW, so we bring clients lessons learned from our own adoption, integration, and scale. In October, we also became a launch partner in the SpaceX Super Intelligence Partner Network, adding Grok to the models orchestrated by CI&T FLOW alongside Mistral and the hyperscalers. Even the companies that build the models need partners to make AI work inside the enterprise. That’s the layer where CI&T operates. With that, I will hand it over to Stanley to walk us through how our delivery engine shows up in our numbers.

Stanley Rodrigues: Thank you, Bruno, and good afternoon, everyone. Revenue reached a record $146.3 million, up 14.9% year-over-year, entirely organic and ahead of our outlook of at least $145.7 million. At constant currency, revenue grew 11.2%. For the first 9 months, revenue reached $425.7 million, up 19.8% or 13.6% at constant currency. Let me show you where that growth came from. By region, Latin America led at 20%, followed by New Markets at 17.6%. North America grew 8.7% year-over-year, and its momentum is building. Revenue in North America grew 3.9% from the second quarter, the fastest sequential growth among our 3 regions. By industry, financial services, our largest vertical, grew 26.1% and technology and telecom 40.2%.

And by client, revenue from clients outside our top 10 grew 17.1%, ahead of the 12.2% from our 10 largest accounts. That is the third consecutive quarter in which our broader base grows faster than our largest clients. We are adding new clients and our offerings are reaching more of the accounts we already serve. Our growth does not depend on a few large relationships. Last quarter, we said AI monetization would expand our gross margin. This quarter, it did. Adjusted gross profit reached $53.5 million, up 24% year-over-year and 15.8% sequentially, growing well ahead of revenue.

Adjusted gross margin reached 36.6%, up 270 basis points year-over-year, our first year-over-year expansion of 2026, even with the stronger Brazilian real and the payroll tax resumption imposing headwinds. There is a concern in our industry that AI productivity challenges revenue when paid by the hour. But it is not how we are increasingly being paid. In our value-based models, we are paid for output and outcomes, so instead of a discount, productivity becomes margin. That is why 40% of the new engagements we signed this quarter are value-based, up from 30% in the first half. And CI&T FLOW let us deliver more with the same team. Our cost of service grew 10.9%, below revenue growth of 14.9%.

AI makes us more productive. Our commercial model lets us and our clients share the value. Last quarter, we said we expected our adjusted EBITDA margin to improve sequentially. It did. Adjusted EBITDA reached $22.6 million, up 19.1% from the second quarter, with margin expanding from 13.3% to 15.5%. Year-over-year, adjusted EBITDA was 3.9% lower because of the stronger Brazilian real. On an FX-neutral basis, it would have been $24.3 million, up 3.4% from the third quarter of 2025, with a 17.2% margin. Excluding currency, our EBITDA is already growing while we keep investing in growth. This expansion came even as we stepped up investment in our sales engine.

Selling expenses were 14% of revenue, up from 11.9% in the second quarter. That reflects the structural expansion of our commercial organization for new offerings and verticals and the targeted investments to scale our agentic SDLC initiative, which we concluded this quarter. From here, we expect selling expenses as a percentage of revenue to decline from third quarter levels. Those investments are already paying off. Our pipeline is 50% larger than a year ago, and we are adding new clients. At the same time, general and administrative expenses fell to 10.2% of revenue from 11.3% in the second quarter and 11% a year ago, delivering operating leverage across the rest of our structure. Moving to the bottom line.

Adjusted profit was $11.5 million, up 2% year-over-year, and adjusted diluted earnings per share was $0.09, up 4.5%. Earnings per share grew faster than profit because of our capital allocation. We repurchased $2.9 million in shares this quarter and $9.1 million year-to-date, and our weighted average diluted share count is 2.4% lower than a year ago. We buy back our own shares because we believe in the value we are building. Cash generation remains strong. Operating cash flow was $22.4 million in the quarter, nearly 100% of adjusted EBITDA. With that, I will turn the call back to Cesar for our business outlook.

Cesar Gon: Thanks, Stanley. For the fourth quarter, we expect revenue in the range of $142.3 million to $152.0 million. At the midpoint, that is a 9.6% growth in U.S. dollars, or 9.3% at constant currency against our strongest comparison base of 2025. The range reflects Brazil and the United States, our 2 largest markets, coming out of election cycles. Clients are setting new budgets and currencies are more volatile. Demand is strong. Our pipeline is 50% larger than a year ago. The question is when demand converts, not whether it does. For the full year, we are raising the low end of our revenue outlook to $568 million, with a range up to $578 million, or 16% to 18% organic growth.

Our revised outlook includes a positive FX impact of approximately 450 basis points. And we continue to expect adjusted EBITDA margin in the range of 15% to 17%. This quarter showed that our model works. We said gross margin would expand, and it expanded 420 basis points. We said EBITDA margin would improve, and it improved 220 basis points. Revenue is growing faster than our team, and our broad client base is growing faster than our largest accounts. We closed 2026 with a strong model and a large pipeline, well positioned for 2027. We put AI into production for large enterprises. And increasingly, our clients pay us for outcomes, not hours.

I want to thank our clients for their trust and every CI&Ter for the energy and talent behind these results. With that, we are ready to begin the Q&A session. Thank you.

Eduardo Galvao: [Operator Instructions] The first question comes from Gates Schwarzmann from TD Cowen.

Gates Schwarzmann: On for Bryan Bergin today. So you guys had mentioned the 50% growth in the pipeline this quarter. That’s an uptick from 40% last quarter. Can you help us parse out what are some of the underlying trends between what’s core pipeline growth in agentic SDLC versus maybe more of your traditional digital engagements? Additionally, you’ve seen some good growth here in the top client cohort. Just curious if through both of these pipeline and top client growth, do you have any visibility now into next year, any sort of early considerations in terms of growth levels?

Cesar Gon: Gates, I can start with your questions. First, yes, we disclosed that in this third quarter, 40% of our new sales were already new value-based commercial models. And an additional data point is, for new clients, this number goes to 75%. So for every single new sales for new clients, we are being able to basically convert to the new value-based commercial models. That is the first big news in terms of the demand and our ability to convert the pricing model. In terms of demand type, we see basically 3. We are using this model of 3 types of demand. The first is AI-enabled services, basically agentic SDLC. That is probably half of what we are selling now.

The second is AI transformation. That is a package that includes modernization, data, including ontology, Decision Intelligence, and so on. This is basically going ahead a move preparing the company for AI transformation. And then we have recently launched what I consider the crown jewel of our offerings, that is the agentic reinvention, the business reinvention with AI that is the most transformative offering, and we are getting a very good traction in these first 2 quarters of launching this new offering. And so the trend is companies are combining, preparing, enabling the services with agentic SDLC, a lot of traction with our AI transformation offerings, and an initial traction for the new agentic business reinvention.

That probably will figure — will be more relevant in 2027. You asked regarding we have a good — a very strong pipeline, 50% larger than the same period last year. So we are foreseeing a very good year ahead. But right now, we are focused on our Q4, and we’ll be back here in the next call to give you details about what we are forecasting for 2027.

Bruno Guicardi: If I can complement, you asked about how much of bookings we already have for next year, right? So remember, like most of our growth comes from the portfolio of clients. So very little, usually less than 10% of the year, comes from new logos and land activity, right? So we do have visibility into most of what we’re going to do in 2027.

Gates Schwarzmann: Understood. One more on my end. So a lot of moving parts with gross margin this quarter. Can you maybe help unpack some of those moving parts? You’ve gone over FX. Just saying, we know that like some of those investments also in agentic SDLC stopped this quarter. Can you help unpack maybe how we should expect SG&A and gross margin to trend in the coming quarters, especially now as you take more and more engineers to 10x productivity, to 20x productivity, et cetera?

Stanley Rodrigues: Gates, well, thank you for the question. Gross margin, we have 2 major factors there. First one is FX, as you mentioned. The other one is the deliberate investments that we are making towards sales and agentic SDLC. So let’s unpack this. The FX, simple, 170 bps. If you compare the year-over-year margins, we dropped 300 bps. So out of those 300, 170 is with regard to FX. The other 130 that’s derived mainly from the investments. And we have — within that number, we have a bunch of things. For example, first, the movements we are making towards adding value-based commercial models. This has been added. You may see, for example, revenue per head count improving by 10%.

You see, for example, we grew 14.9% in sales, while we grew only 1.8% in head count in that period. Also, we have built in there, we have a payroll tax resumption in Brazil, which is a headwind. Of course, the sales and agentic SDLC by themselves represents 600 bps. We have G&A operating leverage helping as well there. So all combined into those 130 bps there. Sequentially, we have a gross margin improving by 19.1%, which is 220 bps, and 160 bps, if you would, in FX-neutral. So that trend will continue. So you mentioned what we should expect, right, with regard to margins.

So you should expect this incremental presence in our mix of those new models, new commercial models, and also slowly that migration from traditional time-and material into those new models that will reflect in the margins. Also, the operating leverage on both the G&A and also sales, you should expect that thing happening towards the future. So mainly those elements.

Eduardo Galvao: The next question comes from Gustavo Farias from.

Gustavo Farias: Two things on my side. So first of all, if you could comment about the partnerships, the several partnerships that you guys have — Anthropic, Mistral, and all the others — how that has been performing so far? How much of it, if any, has already contributed in this quarter? Or if we should expect it to kick in further in the future? And the second one, if you could please update us on your capital allocation priorities for 2027.

Bruno Guicardi: I can take the first one, Stanley can take the second one. Partnerships has been increasingly important for us, Gustavo. Today it’s an important channel. All partners combined, they represent around 20% of kind of the — we measured this as what we call partner attachment, like what deals that have a partner, either that we brought the deal to the partner, we kind of won together, or the partner brought it to us. So 20% in 2026 is already with partners. So it’s a big increase comparatively to the kind of the last years, and I think we’re just going to grow in 2027.

Those partnerships with the frontier labs are more recent, and they’re very exciting in terms of the types of opportunities that they’re bringing. Not very relevant for the revenue in Q3 yet, but we hope that will be very relevant for the business generation in 2027.

Stanley Rodrigues: Gustavo, can you repeat the question, please?

Gustavo Farias: Of course. Just an update on your capital allocation priorities for 2027.

Stanley Rodrigues: Okay. We, of course, first priority is to continue this trajectory on investments towards the combination of AI, new offerings, which is key for our future. We have been very successful in everything that we are doing and in our bets, so very assertive. So that’s the main priority. We have the opportunity to continue our share buyback program, which we will — we continue to invest. Of course, growth itself demands capital. As we are growing, this is kind of automatically happening. And we’ve been paying down debt as well. So I would say those 4 items would be the — and we are very selective towards M&.

For example, we are not very proactive in terms of thesis, but we do see opportunities here and there. And if we see any opportunity, we may tackle those opportunities.

Eduardo Galvao: Our next question comes from Steven from Wedbush.

Steven Wahrhaftig: I want to start off with the comments around the pipeline because you mentioned that the pipeline is actually doing quite well. It’s up 50% year-over-year. Can you talk about the breakdown between the new and existing clients of this pipeline? Is majority still coming from existing clients expanding their deals, as you mentioned on the call? Or is there a lot of new logo traction? And then specifically when it comes to converting that pipeline, I mean, it seems like there’s a lot of positive momentum there, but the organic growth is actually not heading in the right direction. It actually decelerated in the quarter, but we’re still seeing a lot of positive momentum in the pipeline.

So is there any issue with actually getting the deals to convert from the pipeline to revenue?

Cesar Gon: Steven, basically, we are seeing, of course, as a result of our increase in our sales effort and a very relevant increase in our sales pipeline, 50%. It’s basically continued to follow 70% of this pipeline is from our current client base, and 30% are related to potential new clients. So it’s a larger pipeline but following the same land-and-expand pattern as always. Regarding the conversion, I mentioned during my explanation that we just get out of 2 election cycles in Brazil and the U.S. So we kind of had some caution in forecasting, and the visible effect is really FX volatility, a lot of volatility. As you know, we have a representative number in revenues in Brazilian reais.

So that explains the range we are forecasting Q4. But the pipeline is there. The conversion rate is in a max of our history. So it’s going to convert. It’s not –it is just a matter of when it’s going to convert. And we are kind of adding this layer of conservative because of this macro — recent macro news. But I think we are very, very assertive that our sales effort is paying off and increasing our pipeline, and we will continue to have an amazing good conversion rate. So this is — I’m sure we are in the right direction in terms of continuing — and combining this with expanding our gross margin. That was the original plan.

AI deployment for growth and AI monetization to increase our margins. And both things are [ working ].

Steven Wahrhaftig: Understood. If I can just squeeze one more in, because, Stanley, I think from one of the answers you had for a different question, you mentioned that the employee head count actually increased 2% year-over-year, which is a slower growth rate than we have seen over the past couple of quarters. Was that intentionally done? And was there anything that impacted you from hiring more sales capacity to accelerate that growth even further? Can you give us a little bit more color on what to expect moving forward?

Stanley Rodrigues: Yes. We may say it’s intentional as a consequence of everything that we are doing with AI, the way we are delivering everything that we are producing, right, in terms of services. So it is a natural consequence. As we improve, as I said, the value-based commercial models, they require less of that relationship of — that used to be one-to-one, right? Anything that would grow in revenue would grow in head count. This is changing. So it is intentional from the business perspective, and this is a natural consequence, right?.

Eduardo Galvao: The next question comes from Luke Morison from Canaccord.

Lucas Morison: So I want to ask one that kind of tries to get at the relationship between sort of revenue growth from here and your gross margin expansion. So I’m wondering, as you’re moving existing customers onto your value-based models, what happens to the size of that relationship? Does the client end up spending about the same with you and just getting more out of it? Are they giving you more budget because you’re doing things more efficiently and so they’re taking spend that would otherwise go to competitors and spending more with you? Or do the savings you’re delivering them come out of whatever is left in their budget?

Basically, just trying to understand the extent that the higher margin comes with durable growth going forward.

Cesar Gon: Sure. Thanks for your question, Mike (sic) [ Luke ]. But basically the model for existing engagement was kind of deploy the productivity of agentic SDLC and getting — replacing some competitors or low-performance competitors, I would say. So basically, we try to keep the same volume, but getting more client share and expanding our margins, and sharing part of the benefits with the clients. I think this was the main pattern of keeping the revenue, increase our margins, and also help our clients to get efficiencies around the deployment of agentic SDLC that we did across the board. We are still working on getting more client share by replacing non-AI or low-AI-performance competitors.

And this is basically the strategy of moving — evolving to the value-based models, but not destroying or reducing the revenue level that we have.

Bruno Guicardi: Luke, if I can complement, if you think about how this industry works, like 80% of what our clients spend is just to keep the lights on and just small enhancements and kind of keep compliance going. So when they have the chance to actually do more, to actually innovate and partner with business areas and actually do things that actually they’ve been demanding for years, right? So we call it playing on attack instead of just playing defense. That’s what our smartest clients are doing. They’re just taking advantage, [ then how ] things can do it.

You can do things faster and cheaper and then do more and kind of playing on, stop playing defense, and doing more — in some cases, just also capturing some client pocket share. Things will happen.

Cesar Gon: Yes. And you are right, Bruno. And also very risky pre-AI, for example, legacy modernization was considered a very risky business before AI. Now it’s not just fastening and cheaper, it is riskless, because you have AI to understand the [ latest ] business rules and update that. So a lot of very complex things now are less risky and the equation of return on investments are better. So AI is kind of a positive force in terms of leveraging demand inside these large organizations.

Lucas Morison: And then just maybe a follow-up. The model providers over the last few months, they’ve announced huge investments in various services-led initiatives and ventures. As you see that happening and as those model providers build out their own deployment teams and partner initiatives, like how do you see the economics and the share of business splitting between the labs and firms like yours?

Cesar Gon: Thank you for the question, because this is probably the most amazing news for us. It proves that AI will increase — AI deployment offering by a scale that no one is ready to fulfill. So they are worried about the lack of AI deployment companies. And I think we have a scaled AI deployment now in a number that is very rare in the industry. So of course, the economics will converge. I don’t believe the FTE levels these labs are promoting are sustainable. But the main concept that to deploy AI in a large organization is, first, it will demand a lot of specialized services. Second, is a long-term journey.

We have 10 years ahead of demand around AI deployment, and this is very, very good news for us as we foresee this opportunity almost 4 years ago.

Eduardo Galvao: The next question comes from Maria Clara Infantozzi.

Maria Infantozzi: I would like to explore a little bit more on how you see the pipeline evolving per geography, especially in Brazil. Can you please elaborate how clients’ willingness on investing in AI has been evolving, especially taking into consideration the macro landscape? And a second question related to engagement levels. Since you are noticing an improving productivity within the same clients, do you have any operational KPI such as churn that could be shared with us so that we gain comfort that your retention rates keep improving?

Cesar Gon: Thanks for the questions, Maria Clara. First, I think it’s too early. We have a very strong pipeline in Brazil, as in the U.S. Too early to measure the effect of the recent election. Let’s see. I think somehow these investments are inevitable. For competitive reasons, companies cannot avoid capturing the efficiency and the differentiation opportunities around artificial intelligence. I think we’ve moved from the pilot moment in the industry to the production moment, and that will increase the battle, the competitive battle in different industries and verticals, and that will lead to more demand around that.

In the short term, maybe some delays, but so far, we don’t have any concrete results, only the FX, the new level for Brazilian to U.S. dollar ratio. The second question is regarding churn. You mean client churn?

Maria Infantozzi: Yes.

Cesar Gon: Yes. Our retention is — we normally disclose the revenue retention rate annually. So in the next quarter, we will provide the number for 2026. And we don’t see any meaningful variation. I think we continue with a very strong retention. That’s why the majority of our growth continues to happen in our portfolio in the short term, and the new clients normally contribute for year 2 and year 3 as we expand. So the land-and-expand engine continues to work, and we don’t see any relevant difference around that.

Eduardo Galvao: Next question comes from Puneet Jain from J.P. Morgan.

Puneet Jain: Nice improvement in gross margins on a sequential basis. So my question is like how high your gross margins can go as the new models continue to improve in mix? In other words, like how should we think about incremental margins at GM level on some of the new work you do?

Cesar Gon: Thank you, Puneet. Our equation for gross margin improvement is less related to the capabilities of the models. I think we have a multimodel model where we can combine the best of breed for each kind of problem we are solving in terms of capabilities and costs. I think the equation is more related to our ability to continue to convert the commercial models. This is the main driver for improving our gross margin. And the part of this equation is IP. As more intellectual property we have in our offerings, it clearly increases our ability to speed up the introduction of value-based models. So I think there is a lot of room to continue improving our gross margin.

And this is — I think it’s what we are by design executing: a company that can expand revenue and margins not in a linear way with head count. And this has already happened, as our numbers are showing. So I think there’s still a lot of room for gross margin improvement based on commercial models and intellectual property delivery.

Puneet Jain: No, I’m sorry, I should have clarified. When I said models, I meant like these new delivery [ cadence ].

Cesar Gon: Okay, okay. You were not referring to the LLMs.

Puneet Jain: Yes. No, but like is there a way to think about like incremental margins like the new work that’s coming in under these models, delivery models, like how much of GM like is for those IP-based work or for some of these agentic SDLC and all those?

Cesar Gon: Yes. The current number is in average, we have 8 to 10 percentage of points above the old traditional time-and-materials models. So it’s very relevant, and it will continue to be. Of course, it’s an equation of differentiation and our ability to…

Puneet Jain: Yes. No, that’s amazing. That’s good to know. And then your fourth quarter guidance, like the range was wider than usual. Like, it’s give or take, like about $10 million. So what were the reasons for that? And then what can drive acceleration from 4Q levels into next year? Like you talk about some of those pilot projects and all those like can come through, elections are behind you in Brazil and midterms in the U.S. So how should we think about 2027 growth in relation to where you’re going to exit in 4Q of this year?

Cesar Gon: Okay. For Q4, the low end is macro uncertainty and FX volatility. And the high end is pipeline conversion. It’s the best pipeline in our history, and we are sure we’re going to convert a good chunk of it, but not sure if it’s going to happen within 2026. And so even though the prospect for next year is very good, as we believe we are kind of moving the pieces of our strategy, we have more offerings coming out of our differentiation strategy with more IP-based offerings, we have data evolving in an amazing way as a big part of our strategy, we have partnerships, as Bruno mentioned, evolving.

It’s around 20% of our sales, and it will increase for sure as we are — especially with this new partnership with Anthropic and other frontier models. So a lot of things are moving in the right direction. Of course, we cannot anticipate our outlook for 2027. It will be the main topic of our next meeting here for sure.

Eduardo Galvao: That concludes our Q&A session. I’ll now invite Cesar Gon to proceed with his closing remarks.

Cesar Gon: Thank you, Eduardo; Stanley. Thank you all for joining us today. To all CI&Ters, thanks for your hard work. And to our clients, thank you for choosing CI&T as your partner for AI deployment. As a final note, we said AI would show up in our margins. It did. Same team, more revenue, better economics. So we are building a company that scales revenue faster than head count and grows more profitable as our new commercial models mature. That is the main message here. Stay well, see you soon. Bye-bye.