CI&T - Earnings Call - Q3 2025

Transcript

Eduardo Galvão (Director of Investor Relations)

Good morning. Welcome to CI&T Earnings Call for the third quarter of 2025. I am Eduardo Galvão, Investor Relations Director at CI&T. Joining me on today's call are Cesar Gon, Founder and CEO; Bruno Guicardi, 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 Q&A session. If you'd like to submit a question, please send it via email to [email protected]. The presentation is available on the company's Investor Relations website, and the replay will be available shortly after the event is concluded. Some of the matters we'll discuss on this call, including our expected business outlook, are forward-looking statements. They are subject to known and unknown risks and uncertainties, which could cause actual results to differ from those expressed on this call.

We caution you not to place undue reliance on these forward-looking statements, as they are valid only as of the date when made. During this presentation, we'll comment on certain non-IFRS financial measures to evaluate our business. Please refer to the reconciliation tables of non-IFRS measures in the earnings release for more details. Our agenda for today includes an overview of our quarterly highlights, followed by some of our business cases. We'll then talk about our people and our financial results. At this time, I'll pass it on to Cesar Gon to begin our presentation. Cesar, please.

Cesar Gon (Founder and CEO)

Thank you, Galvão, and good day, everyone. As we celebrate 30 years, I would like to highlight our winning operating model built on four pillars. It starts with three decades of experience shaping a world-class talent ground. Our teams use this expertise to co-create AI agents and digital solutions that solve real client problems. We deploy this combination of talent, proprietary technology, and methodology using a unique delivery model to win and expand clients. With every engagement, the learning accelerates, expanding our knowledge, refining our tools, and propelling our growth. We are amplifying this flywheel by dogfooding AI across our operations. As we look back, it's remarkable how CI&T has evolved through each major tech shift, from the early internet and e-commerce to mobile to cloud, and now artificial intelligence. At every stage, we've helped clients adapt and turn technology into business impact.

Today, the same spirit continues with CI&T FLOW, our AI management system. With an unprecedented level of adoption, we are combining leading large language models with our proprietary tools and data to create thousands of AI agents and prepare our clients for the inevitable agentic world. Across the industry, there's still a clear gap between AI ambition and real results. Most enterprises haven't yet turned AI investments into meaningful impact. A recent MIT study titled "The GenAI Divide" highlighted that 95% of GenAI projects are failing to deliver measurable financial results. That gap created strong demand for partners who can turn experimentation into scalable business value. This is where CI&T stands, built to help the 5% who are making AI work and to expand that group. It's a challenge tailor-made for our model and a major opportunity ahead. Now let me turn to our quarterly earnings highlights.

Revenue reached another historical record of $127.3 million in the third quarter of 2025, representing 12.1% organic revenue growth at constant currencies year-over-year, above our guidance. This also reflects a 13.4% year-over-year increase in reported revenue. Our Adjusted EBITDA margin was 18.5%, showing a healthy and sustainable profitability. Finally, our adjusted profit margin was 8.9%. This quarter marks CI&T's fourth consecutive quarter of double-digit organic revenue growth. Our AI strategy is effectively bridging the GenAI divide for our clients, transforming their AI investments into tangible efficiencies and high-impact solutions. These AI-powered offerings have expanded our sales pipeline, increased our wallet share with clients, and reinforced our role as a key partner in their digital and AI transformation journeys. Now let's explore some inspiring client stories that showcase the diverse and powerful applications of AI.

Ford partnered with CI&T to expand its Wings platform across South America. Using CI&T FLOW, our AI management system, the team analyzed 4,800 minutes of meetings and 50,000 lines of code, cutting delivery time by two months. The rollout in Argentina was completed in just 10 months. Beyond speed, AI enhanced quality and accuracy, transforming how the project was delivered and reflecting local market needs. This success shows how deep business knowledge and advanced technology can create real impact at scale.

CI&T is supporting Terranus Energy, a renewable energy company in Singapore, to enhance the technology behind its solar operations. We're modernizing their legacy systems, building a new Azure Cloud platform, and providing real-time monitoring for continuous performance. Together, we're ensuring clean energy runs smarter, faster, and more efficiently, powered by data and innovation.

Porto adopted CI&T FLOW, our AI management system that enhances software delivery. In just a few weeks, development teams became 38% more efficient, reduced task time by 18%, and fixed 79 legacy code issues in one day. Test coverage grew across the process, increasing both quality and confidence. Together, Porto and CI&T show how AI can simplify and strengthen digital transformation.

At CMG Financial, we're rebuilding how mortgage technology gets built, and that requires a fundamental shift in mindset. The traditional model is about output: how many developers, how many hours, lines of code. We need partners focused on outcomes: what actually gets delivered, what business value gets created. CI&T understood that before we even had to explain it. They're not selling us seats; they're delivering results. That is the kind of partner you need when you're trying to transform, not just maintain. First, they bring us capabilities we don't have: both emerging technologies like their FLOW AI platform, deep financial services expertise, and real financial services experience across domestic and international markets. The model that worked in 2023 won't work in 2025.

We need partners who are as comfortable with AI-generated code as human-written code, who measure success by outcomes, not hours, and can help us figure out what right-sized teams actually look like in an AI-first world. CI&T has shown us they can make that shift. Now it is about scaling it.

The New York Stock Exchange was packed on October 15 for our biggest impact AI event yet. Leaders from top global brands shared how AI is driving real results, from scaling beyond pilots to reimagining customer experience. AI isn't the future; it's the now, and the ideas born here will keep shaping enterprise transformation. Everyone's talking about artificial intelligence. We asked a different question: who's creating real impact? Together with Fundação Dom Cabral, CI&T launched the AI Lighthouse Awards, Brazil's first index measuring how companies use AI responsibly and at scale. It's more than an award; it's a benchmark guiding organizations toward ethical, human-centered innovation. Backed by data, research, and voices from Brazil's top business leaders, the initiative sparked nationwide coverage, reaching over 600,000 people through Forbes and other top media, and positioned CI&T as a leading voice in Brazil's AI transformation.

Together with the Costa Foundation, CI&T partnered in the Charity Bike Ride 2025 across Wales, turning every climb into a chance to make a difference. Each ride helps children in coffee-growing communities get closer to education, safety, and opportunity. On August 26 and 27, CI&T was an official sponsor of the Lean Summit 2025. On the main stage, CEO Cesar Gon joined José Roberto Ferro to discuss what truly transforms organizations: practice. The event also marked the launch of the Portuguese edition of Managing on Purpose, featuring a foreword written by Cesar.

We joined the Gartner Summit in London, where leaders from around the world came together to talk about what's next in tech. On stage, our team shared how CI&T is helping companies turn AI into real business value with CI&T FLOW, our AI management system. We showed how one of our clients in banking unlocked over 200,000 hours in just nine months using AI across their delivery process. Because when AI connects every step of the journey, it stops being a tool and starts driving real transformation.

Now, I would like to invite Bruno to provide insights into our talent strategy and the evolution of our offerings.

Bruno Guicardi (President for North America and Europe)

Thank you, Cesar. It's a pleasure to be here. We entered the quarter with more than 7,800 CI&Ters, a strong 16.3% growth year-over-year, ensuring we have the talent to meet the growing demands of our clients. Our people strategy begins with an advanced hiring process. We have built a systematic engine to attract and onboard the right people. It begins with our partnerships with top technical universities, which provide a large, high-quality pipeline of young talent. Simultaneously, our reputation as a next-generation technology firm, committed to a career-long development, makes us a desirable destination for experienced professionals. Finally, we utilize an AI-enabled screening process to quickly identify the best candidates, and we prioritize filling open positions with our own internal talent whenever possible. This creates a robust and efficient hiring model.

The direct result of our hiring process is the ability to scale our workforce quickly, supporting our revenue pipeline. Our robust training and development programs drive industry-leading employee satisfaction and retention, leading to a healthy voluntary attrition rate of 10.9%. Now, let me discuss our delivery model, which is central to delivering AI value for our clients. Before extending these capabilities externally, we ensured mastery of AI internally by developing a systematic playbook for driving AI adoption. We've achieved an impressive 85% adoption rate of AI tools across our entire organization. This highlights our capability to effectively integrate new technology at scale. This widespread adoption has significantly fueled the growth of CI&T FLOW. Over the past 18 months, the number of agents our teams have created and are using to deliver value to our clients has increased 15-fold.

Today, our system operates at substantial scale, with 4,700 active agents executing tasks across our business, from simple automations to highly complex workflows. Leveraging our extensive network of AI agents, we've developed compelling solutions that address our clients' critical needs. To give you a concrete example, our data modernization studio features a set of AI agents designed to streamline and modernize data pipelines. This end-to-end approach encompasses data assessment, quality checks, and script generation, ensuring seamless integration into modern data architectures. Our solution significantly automates the transformation of legacy systems into advanced data platforms. By utilizing GenAI, we generate code, create technical documentation, and produce visual data lineage diagrams, therefore significantly reducing manual effort and risk. Through our data modernization fast track, we convert isolated data islands into comprehensive data intelligence systems, expediting the process from assessment to post-migration.

This approach overcomes the time and resource challenges of traditional migration, enabling our clients to quickly unlock the full potential of their data. As we continue to innovate with generative AI, we're witnessing a shift in the market towards more flexible, value-based pricing models. Clients are seeking greater predictability and a clearer connection between their investments and business outcomes, presenting us with an opportunity to monetize the value created by our AI-driven approaches. To align with this shift, we are actively experimenting with new engagement models such as fixed price and output-based contracts, which better align our compensation with the successful outcomes we deliver for our clients. We anticipate a gradual transition to these models over time. With our AI management system, we are unlocking entirely new revenue streams. The large-scale opportunities driving our growth today were not feasible just a few years ago.

Clients turn to us for our advanced AI capabilities, which empower them to address their most ambitious and complex challenges, whether it involves modernizing legacy systems, building predictive platforms, or creating new AI-native business models. The direct result of our AI value proposition is our ability to consistently grow and capture market share. The value we deliver to our clients translates directly into the strong financial performance we provide to our shareholders. To guide you through our financial profile in detail, I'll now hand it over to Stanley.

Stanley Rodrigues (CFO)

Thank you, Bruno, and good afternoon, everyone. Let me walk you through our third quarter 2025 financial performance. Our revenue in the third quarter was $127.3 million, an increase of 13.4% compared to the same period last year, fully organic. On a constant currency basis, revenue grew 12.1% year-over-year. Looking at the year to date, our revenue reached $355.4 million, a 12.8% increase over the nine months 2024 at constant currency. As Cesar mentioned, this quarter marks CI&T's fourth consecutive quarter of double-digit organic revenue growth, demonstrating the resilience and solidity of our business model. In the third quarter of 2025, our revenue from Latin America experienced a remarkable 35% year-over-year growth. In North America, revenue increased by 6% compared to the same period last year. Starting this quarter, we are reporting the performance of our Europe and Asia-Pacific regions together under the designation New Markets.

We are pleased to announce that both regions have recorded sequential growth in third quarter 2025. Focusing on industry verticals, we particularly highlight the strong performance in financial services and retail and industrial goods, which grew by 51% and 11%, respectively, in third quarter compared to the previous year. These sectors have been actively prioritizing digital transformation and modernization. In the financial services sector, companies are increasingly investing in AI-driven analytics to enhance customer experience, streamline operations, and improve risk management. Similarly, retailers and industrial goods are adopting AI technologies to better understand consumer behavior, optimize inventory management, and enhance supply chain efficiency. Our strategic cornerstone for growth continues to be our disciplined land and expand approach. This strategy has resulted in a predictable and stable revenue base characterized by exceptional logo retention and long client tenure. We have 10 clients, each generating over $10 million in revenue.

This cohort has seen a reported revenue increase of 19.5% in the third quarter of 2025 compared to the same quarter last year. Another solid indicator of our expansion with our large clients can be seen by the growing number of clients, each generating $5 million-$10 million in revenue annually, from 11 clients in 2024 to 15 clients in the last 12 months. This illustrates our capacity to compound growth from within our established client base. In the third quarter of 2025, we achieved an Adjusted EBITDA of $23.5 million, marking a 7.5% increase from the previous year. The Adjusted EBITDA margin stood at 18.5%, reflecting a 1 percentage point decrease from third quarter 2024.

This decrease is largely attributed to our anticipated upfront investment in expanding our workforce, with an increase of over 1,100 employees during this period, supporting our pipeline and revenue growth trajectory, combined with an unfavorable FX rate in the comparable period. We've maintained a disciplined approach towards our operating expenses. This is evident in our reduced SG&A as a percentage of sales. For the first nine months of 2025, we generated $46.5 million in cash from operating activities, translating to a robust 72% cash conversion rate from Adjusted EBITDA to operating cash. This strong cash conversion provides us with the flexibility to reinvest in strategic initiatives to foster growth. In the third quarter of 2025, our adjusted net profit reached $11.3 million, marking a 10.6% increase compared to the same period in 2024, with an adjusted net profit margin of 8.9%.

Our adjusted diluted earnings per share for the quarter was $0.09, demonstrating a notable 16.4% increase from last year. In summary, we have successfully achieved double-digit organic revenue growth on a consistent basis while maintaining solid profitability metrics and strong cash generation. Additionally, we are actively executing our share repurchase program, further enhancing shareholder value. At this point, I would like to invite Cesar back to the stage to share our business outlook.

Cesar Gon (Founder and CEO)

Thank you, Stanley. For the fourth quarter of 2025, we project revenue to be between $130.4 million and $132.6 million. The midpoint of this range represents a year-over-year growth of 16.8% on a reported basis and 12.5% at constant currency. For the full year of 2025, we are maintaining the midpoint of our revenue guidance while refining our expectations. We anticipate organic revenue growth at constant currency to be between 12.5% and 13% year-over-year.

Additionally, we are reaffirming our Adjusted EBITDA margin guidance, which we expect to be in the range of 18%-20%. This guidance reinforces the strong pace of organic revenue growth reported throughout the year, above the industry average, and positioning us well for continued expansion as we move into 2026. This outlook also reflects the effectiveness of our growth initiatives: a robust commercial pipeline, ongoing expansion with our largest clients, and the evolution of our AI-boosted offerings. In closing, I want to extend my heartfelt gratitude to all CI&Ters around the world. Your dedication to innovation and to delivering exceptional value to our clients remains the driving force behind our progress. This concludes our presentation. We will now open the floor for questions. Thank you.

Eduardo Galvão (Director of Investor Relations)

Okay, 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 your question. Then, when you're done, please mute your line. The first question comes from Luke Morison from Canaccord. Hi, Luke. Please go ahead.

Luke Morison (Vice President and Equity Research Analyst)

Hey, guys. Nice results, and thanks for taking the question here. I just want to double-click on, you know, the new engagement model slide that you presented. You know, it first came out at your analyst day. You showed it here again. Just maybe help us think, like, how should we be thinking about the scalability of those models from here? Where are you seeing the earliest traction or client readiness, and what needs to happen operationally or contractually for those newer constructs, particularly Flow or agent-based consumption, to represent a more meaningful share of your revenue mix over time?

Cesar Gon (Founder and CEO)

Thank you. Thank you, Luke. Great to see you. I can start, and Bruno, compliment me at your wheel. As you mentioned, we see the future of our industry evolving from a time-material-based pricing model to more value-based pricing models, more close. We have a more close link to the business outcome. We see this happen in a gradual way. It is also an opportunity to monetize the intellectual property that will be embedded in every single engagement in the future agentic architecture. What we are doing now is proactively, we are introducing this approach to our clients and getting encouraging new results with our main clients. In terms of timeline, I see this as a midterm opportunity.

Gradually, we will translate, and this is a major opportunity to translate gradually our superior performance into not only margins, but also scalability, and also giving our clients a more flexible, a more powerful set of options in terms of pricing models. We are not giving a concrete outlook right now, but I think probably along the next 12-18 months, we will have this as a relevant part of our P&L and the way we are seeing the future in our commercial and pricing models.

Bruno Guicardi (President for North America and Europe)

Maybe just to complement Luke on your question around the education that clients require on their side to buy those models. Of course, there's the consumption base. It's actually where most of the ramp-up of that education needs to happen, and it's not easy. It's kind of go to procurement, and they have to learn a new way to buy, right? That will take some time to happen. There are other models that also tap into that ability to automate work in kind of a, which is kind of an output-based model where we can have like a fixed price by unit of software developed. We have like an even fixed price of overall engagements because of the tools that we have that we kind of can map those engagements and can be really assertive in terms of what we will deliver.

There are models that are very easy to buy that any procurement area could buy just right now. They do not require any education, right? There is this new, you know, thread here with the consumption-based, with IP-based consumption that will take some time. All in all, I think we will go to move very quick in the next, to Cesar's point, 12-18 months towards those models.

Luke Morison (Vice President and Equity Research Analyst)

Excellent. Very helpful. Maybe just a quick follow-up here. Just regarding your guidance, the guidance for Q4 implies continued sequential acceleration in growth as we exit the year. I know it's early and you're not guiding to next year, but just help us think about just sort of the durability of that growth. How do you view the cadence of that sustainable growth as we enter 2026? Are there any factors we should be keeping in mind around seasonality or demand normalization as we enter next year? Thank you.

Cesar Gon (Founder and CEO)

Sure. We are based on our outlook for Q4, I think, basically on the consistent performance of the nine months of 2025 and combined with a very solid commercial pipeline. What is, I think, a good data point is now we are having a strong sales conversion. I credit this to our differentiation based on our AI strategy, CI&T FLOW, the kind of efficiency, and even the whole positioning regarding adoption of AI. Basically, a consistent track record, a solid pipeline with a stronger sales conversion when compared to last year, for example.

Eduardo Galvão (Director of Investor Relations)

Thank you, Luke. Our next question comes from Gates Schwarzmann from TD Cowen. Hi, Gates. Please go ahead.

Gates Schwarzmann (Equity Research Senior Associate)

Hey, thanks for taking my questions. Gates Schwarzmann with TD Cowen, on for Brian Bergen. Just wanted to touch on gross margin. Looks like it ticked down 30 basis points sequentially. I was curious if you could talk a little bit about the underlying trends there. What are the drivers in terms of gross margin? Particularly, how should we think about what levers you guys have moving into fiscal 2026 that you can pull to both, well, for margin expansion and support EBITDA growth? Also, any sort of color on the actual underlying FX impacts on EBITDA margin or gross margin would be greatly appreciated.

Stanley Rodrigues (CFO)

All right, Gates, thank you for the question. This is Stanley here. First of all, Gates, we are very confident on our ability of delivering this full-year guidance of EBITDA margin. So, 18%-20% Adjusted EBITDA margin for the full year. We've been delivering those robust profitability metrics out of a bunch of initiatives, efficiency gains. Of course, we are scaling SG&A throughout the years. Every quarter, we deliver a lower SG&A as a percentage of revenue. That will not change. We will continue that towards the future, right? Combining that, the fact that we are delivering those robust profitabilities under this benchmark organic growth path, this showcases our capacity to balance very well this investment in the AI opportunity and also this cost discipline that we've been managing the company. We are scaling our business in this very solid manner.

This will not change. Of course, we are not guiding 2026 yet, but we do not have any factor that would mean that this will change.

Gates Schwarzmann (Equity Research Senior Associate)

Understood. Just a follow-up, wanted to touch on demand trends. Obviously, tariff-related volatility has brought a lot of uncertainty in the environment. Can you touch on maybe how that's impacting your various verticals and also touch on the U.S. versus Latin America dynamics? Have clients started to gain any comfort with the tariff-related volatility? Subsequently, have you seen any sort of recovery in terms of discretionary spending or smaller, more strategic spend?

Cesar Gon (Founder and CEO)

Sure. Hey, Gates, I can get this one. I think we are growing sequentially in our regions. We, of course, Latin is stronger now, 12.5% growth sequentially, 35% year-over-year. Driven basically by fast AI adoption among not only companies, but users. North America is also getting good traction now with 5.4% sequential growth. Even new markets now are growing with 4.8% sequentially. Basically, we see two main sources of demand. We see the overall environment improving, certainly driven by the evolution of the AI momentum that is, as I mentioned, very strong in Brazil and warming up in the U.S. We can see by our commercial activity evolving and giving us a very strong commercial pipeline for next years and give us a lot of confidence that we will continue in a growth trajectory in a very good pace.

As a way to qualify demand, I see two groups. One is basically a demand for foundational spending, let's say, that's large-scale projects to upgrade legacy technology and accelerate cloud and data migration. I think this is huge now. Of course, we are extensively using AI and FLOW agents in these, let's say, foundational engagements. There is another very well-known source of demand that is direct AI investment. I see relevant budget allocation moving from traditional IT to AI-specific solutions. Around, let's start with the low-hanging fruit of hyper-efficiency in the software development lifecycle, but going for customer experience journeys, like how you move for more conversational commerce or AI-boosted chatbots. Especially in Brazil, using WhatsApp, for example. We see more broad programs like AI-first transformation engagements.

This is when the client wants a kind of design and a strategy and a roadmap to accelerate their AI adoption. Finally, we are seeing a growing number of use cases using GenAI for optimized or labor-intensive or data-intensive business processes. It is real. It is amazing AI momentum. I think we are very well positioned to continue to capture this opportunity.

Eduardo Galvão (Director of Investor Relations)

Yep. Thank you, Gates. Our next question comes from Maria Clara Infantozzi from Itaú. Maria Clara, please go ahead.

Maria Infantozzi (Head of Brazil TMT)

Hi, everyone. Thanks for the opportunity here. I just wanted to double-click on the improvement of pipeline to sales conversion topic. Cesar, can you give us more color on this? Is there any region that is calling more attention, maybe any specific client vertical that is worth highlighting? What is the pricing strategy behind those new contracts? Are they all coming from output-based, or do you still sell time and material? Lastly, if you could please provide us a view on how you perceive the competitive environment, it would be great as well. Thank you.

Cesar Gon (Founder and CEO)

Sure. Thank you for your question, Maria Clara. I think in terms of vertical, I need to highlight financial services. It is 51% year-over-year growth expansion and 15% sequentially. It is a combination of landing new clients and expanding our main financial service clients. Also, we see a lot of growth in retail industrial goods, particularly in the auto industry, where we are very well positioned and expanding in the U.S. It is more about expanding our wallet share in this retail industrial good portfolio. We also have the good news of tech and telco, where year-over-year was stable, but sequentially now is a 19% expansion. It is very good news. Consider our five main verticals. Three are expanding and two are stable. We see consumer goods and life science is stable in a sequential base. Going for your question regarding pricing models, it is a mix.

Our strategy is not a radical move from time-mature to other models, but offering to our clients a mix of models, and we can combine creatively these models in the best interest of them. It is more of a mixed game of some time-mature, some consumption basis, some piece outcome base, and other models we are inventing because this is a moment where we are really discovering the best way to play this new game in the AI agent world. A lot of engagements also extend from just build for build and run engagements, and we need different pricing models to support this shift too. This is basically, I think it is a long-term game, but it is inevitable that the AI will reshape the way pricing and business model operating in our industry.

I think it's an amazing opportunity for us to improve not only margins, but scalability of our business. Your last questions were regarding.

Maria Infantozzi (Head of Brazil TMT)

The competitive environment overview, how you see competition?

Cesar Gon (Founder and CEO)

Yeah, I think we did, looking back, we did an amazing job over the last three years introducing CI&T FLOW in July 2023 and transforming every CI&T engagement into an AI engagement. We mentioned a lot the massive reskilling of 8,000 people. I see CI&T really ahead of our competitors. I know that everyone is trying to figure out how to play in this new moment of the industry. What we get from our clients is, I think we are ahead. In my perspective, we are accelerating.

Maria Infantozzi (Head of Brazil TMT)

Thank you so much for your answer, Cesar.

Cesar Gon (Founder and CEO)

My pleasure.

Eduardo Galvão (Director of Investor Relations)

Thanks, Clara. Our next question comes from Puneet Jain from JPMorgan. Hi, Puneet.

Puneet Jain (Equity Research Analyst)

Hey, thanks for taking my question. Very nice quarter. This year, you are all set to grow in, give or take, in low teens despite significant headwinds like tariffs and whatnot. As we think about next year, I know you're not providing the guidance, but should we expect growth rates to accelerate next year from current levels?

Cesar Gon (Founder and CEO)

Thank you, Puneet. Thank you for your question. Unfortunately, we are not anticipating 2026 yet. As I mentioned, we are very confident on our future growth based on the evolution of our commercial pipeline and better sales conversion. By now, it's more about delivering a very strong Q4. In the next call, we will be very happy to really give you our guidance for next year.

Puneet Jain (Equity Research Analyst)

That's fair. Can you talk about your hiring plans, like the skills of people you hire, experience level, and should we expect revenue growth to continue to outpace your headcount growth? What would that mean for margins over the near term, at an EBITDA margin level?

Bruno Guicardi (President for North America and Europe)

Take this one. Puneet, our strategy has always been to develop our own people. We think of ourselves as a teaching organization, as a learning organization. We're very proud that I think we learn faster than the average market. I think the achievements around what we are at with Flow and our adoption and the results we're creating for our clients is a proof of that. We hired, we continue our strategy to hire from the base of the pyramid and promote from the inside and give opportunities for people to grow with us and to invest in our people and invest, give the people the opportunity to develop themselves, to reskill, to upskill, and to move on to different roles and different profiles. I think that will be an absolutely critical ability going forward as the industry will transform. All those roles will transform.

People will do things in a completely different way than they do now two to three years from now. That ability to be always learning and not try to hire for a job description because those job descriptions will be very fluid from now on. It is ability to continue to hire for potential, continue to hire for ability to learn and to grow. That is our strategy. I think it will be a winning strategy going forward.

Puneet Jain (Equity Research Analyst)

Thank you.

Eduardo Galvão (Director of Investor Relations)

Thanks, Puneet. Our next question comes from Leonardo Olmos from UBS. Leo, please go ahead.

Leonardo Olmos (Executive Director and Deputy Head of Brazil Research)

Hi, everyone. Thank you for taking my question. Congrats on the numbers. Very good revenue beats. I just want to make sure we do not have anything misunderstood here. For the full year 2025, you reinforced the midpoint of revenue growth guidance, right? You beat Q3's figure. That could assume, and I am probably wrong here, that could assume Q4 is going to be slightly slower than you anticipated. Maybe you advanced some revenue to Q3. I do not know. How should we read this? I know you just said in a previous answer, I am not going to talk about 2026. I get that. I just do not want to leave a wrong impression here on this shift between the quarters.

Cesar Gon (Founder and CEO)

Thank you, Leo. I think it's basically we are guiding keeping the pace, keeping our goal for the year less quarterly raise the midpoint. We are, of course, leaving some room to beat again the number. We are very confident. I think it's a strong year, and we have an amazing exit rate for projecting 2026. It's basically keeping our pace and make sure we leave room for even to accommodate some FX, surprising FX moves we are not expecting, but we need to be conservative in terms of projecting FX. At the end, we are really projecting a solid Q4 and, again, a very good exit rate for projecting next year.

Puneet Jain (Equity Research Analyst)

Thank you, Cesar. Just if I could do a second one. It's another question related to how well you did and what's going to be ahead, okay, if that is a risk. Top client, right? Top client now, when you round up, gets to 12% of total sales. Performance was amazing, right? Congrats on that. I'm sure this is something to celebrate because in the past, we saw how large clients can impact all IT service peers. How do you think about that, especially about, I don't know, should you diversify, should you not? What do you expect in terms of what we heard in the media a couple of months ago that this top client supposedly is going to reduce third party? Is that other part of third party personnel? If you could talk a little bit about top client. Thank you.

Cesar Gon (Founder and CEO)

Sure. I think we are in good shape. Gradually, we have been growing and diversifying our portfolio of clients. I think top one is a massive victor of our value prop. You saw sequentially it grew 13%. Our top 10 clients is growing consistently too. We sequentially 11% our top 10. If you exclude top one, it's still a strong 10% growth in our top 10. If you look only the X top 10, it's a 7% sequential growth. I think it's a very solid evolution. To give you another data point, eight of our top 10 clients are growing sequentially. Regarding specifically our top one, as you know, is a very large financial service organization with dozens of different businesses. We are very proud to be involved in different parts of their business strategy. We continue to expand in different areas.

I think it's the result of our ability to demonstrate efficient, superior results across the board. We see this engagement. We'll continue to grow, but of course, at a slower pace. It is part of what we were anticipating. We have now a lot of new avenues for growth. It is part of the game. We work with very large clients. When they see the concrete results of engaging with CI&T, they tend to concentrate a lot of demand on us. We manage, I think, in a good way, this kind of expansion. I think we are in good shape. If you look at it in a more, let's say, long-term perspective, four years ago, our top 10 were kind of 67% of our revenue. Now it's 43%. Gradually, as we evolve, we will continue to diversify the revenue source.

I think we are in good shape.

Puneet Jain (Equity Research Analyst)

Yeah, no, very good point. The numbers talk by themselves, right? Very good. Just quick, quick follow-up, sorry to abuse my time. How should we think about revenue in these top one clients or maybe top 10 as a whole? How recurring is it? How can we see it so recurring? I get that you maybe won't grow like 70% year-on-year, but how recurring is that?

Cesar Gon (Founder and CEO)

Historically, it's very recurring revenue. Annually, we disclose our net revenue retention, and it's always a strong number. I think the business model, the kind of engagement is the same. If you are investing in AI and digital, and if you are leveraging real concrete results, you will increase your investment. It's an equation of success instead of a project-based model. As we continue to support our clients to expand their strategy, I think we are in good shape to continue expanding, having a very high level of recurring revenue with them by design.

Puneet Jain (Equity Research Analyst)

Very good. Very good. Thank you so much.

Cesar Gon (Founder and CEO)

My pleasure.

Eduardo Galvão (Director of Investor Relations)

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

Cesar Gon (Founder and CEO)

Sure. Thanks, Bruno, Stanley, Eduardo. Thank you all for joining us today. And to all CI&Ters around the world, I'm very proud of what you accomplished this quarter, what we could do as a team. Congratulations for another record quarter. Let's keep it pushing. And a special thank you for our clients for choosing CI&T in such an important moment in the industry. We are helping you, Mr. Client, to co-create the future in this exciting moment of AI-driven innovation. So, everyone, stay well. See you soon.