CI&T Inc(CINT)2023-03-08 20:06Financial Data and Key Metrics Changes - The net revenue for 2022 reached BRL2.19 billion, a 51% year-over-year increase, or 58% growth at constant currency [23][31] - Adjusted EBITDA for the fourth quarter was BRL127.4 million, a 25% increase compared to Q4 2021, with an adjusted EBITDA margin of 20.8% [12][30] - Adjusted net profit for Q4 2022 was BRL54.5 million, a 4.3% increase from Q4 2021, with a net profit margin of 8.9% [12][34] Business Line Data and Key Metrics Changes - The adjusted EBITDA margin for the full year was 19.1%, reflecting the impact of acquired companies [5][33] - The number of clients generating more than BRL20 million annually doubled from 2020 to 2022, indicating strong growth in high-value accounts [32] Market Data and Key Metrics Changes - The U.S. and Europe are the fastest-growing regions, with over 55% of revenue coming from mature economies, expected to trend towards 60% by the end of 2023 [6][14] - The share of revenue from the top 10 clients decreased from 67% in 2020 to under 50% in 2022, with a target of 40% by the end of 2023 [6][14] Company Strategy and Development Direction - The company emphasizes digital efficiency and aims to help clients capture digital opportunities effectively, positioning itself as a leader in digital innovation [4][17] - CI&T's strategy includes a disciplined approach to adding new clients and focusing on sustainable growth through M&A and organic expansion [6][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about technology advancements and the necessity for companies to invest in digital initiatives, despite a conservative approach to new projects due to economic uncertainty [17][60] - The company expects net revenue for Q1 2023 to be at least BRL590 million, representing a 20% year-over-year growth, with a full-year growth projection of 13% to 17% [36][60] Other Important Information - The company has been actively working on its ESG initiatives, including a commitment to sustainability and diversity in hiring practices [10][28] - CI&T's attrition rate improved to 14% in 2022 from 16% in 2021, with leadership attrition remaining below 5% [27][54] Q&A Session Summary Question: Are you seeing any signs of demand stabilization improvement? - Management noted that while there is uncertainty in the budget process, clients are maintaining current digital investments but are more conservative with new initiatives [60][70] Question: Can you comment on the FX losses during the fourth quarter? - The CFO explained that FX variations impacted accounts receivable in the Brazilian operation, which is recorded through the P&L [52] Question: What are the hiring trends expected over the near term? - Management indicated that hiring is typically slower in Q1 but is expected to pick up in subsequent quarters, with a more favorable hiring environment due to economic conditions [51] Question: How is the company preparing for the disruption of generative AI? - The company is experimenting with generative AI tools to enhance productivity across various functions, indicating a proactive approach to leveraging new technologies [55][73] Question: What is the outlook for M&A in 2023? - Management stated that while there will be less M&A activity in 2023, the focus will be on integrating recent acquisitions and preparing for future opportunities [74][75]