CI&T Inc (CINT)

Executive Summary / Key Takeaways

• CI&T (NYSE: CINT) is rapidly establishing itself as a leader in AI-driven digital transformation, leveraging its proprietary CI&T FLOW platform to deliver hyper-efficiency and accelerate modernization for large enterprises.
• The company's "land and expand" strategy, bolstered by AI-first offerings, is driving robust double-digit organic revenue growth, particularly within its top client accounts and in key markets like Latin America and North America.
• Strong financial performance in the first half of 2025, including 12.3% organic constant currency revenue growth in Q2 2025 and an 18.4% adjusted EBITDA margin, underpins a confident full-year 2025 outlook for 10.5% to 15% organic constant currency revenue growth and 18% to 20% adjusted EBITDA margin.
• CI&T's technological differentiation, notably the CI&T FLOW platform, offers quantifiable benefits such as over 50% efficiency gains in the digital creation cycle, positioning the company to capitalize on the "tsunami of volume" expected from AI-driven consumer experiences.
• While macro volatility and competitive pressures persist, CI&T's strategic focus on AI adoption, talent development, and disciplined financial management, including an active share repurchase program, aims to enhance long-term shareholder value.

The AI-First Imperative: CI&T's Strategic Foundation

CI&T Inc., founded in 1995 in Campinas, Brazil, has evolved over three decades into a global technology transformation specialist, serving over 100 large enterprises and fast-growth clients across 10 countries. The company's enduring success, marked by 30 consecutive years of growth by the end of 2024, is rooted in its ability to adapt to evolving client needs and its unwavering commitment to innovation. At the core of its current strategy is an "AI-first" transformation, a deliberate pivot to embed artificial intelligence across its operations and client offerings. This strategic shift is designed to seamlessly combine business transformation with technology and AI, delivering measurable business impact and deepening partnerships, especially with its largest clients.

The broader industry landscape is undergoing a profound shift, with AI advancements rapidly reshaping software development and client expectations. Companies are increasingly seeking partners who can not only understand technology but also align it with strategic business outcomes. This environment presents a secular opportunity for CI&T, as technology investments must now deliver strategic returns. The company's overarching strategy is built on three pillars: positioning AI as a protagonist through its proprietary CI&T FLOW platform, fostering a culture of excellence driven by top-tier talent, and maintaining a client-centric approach that blends expertise and innovation.

Technological Differentiation: The Power of CI&T FLOW

CI&T's competitive edge is significantly amplified by its proprietary AI-powered platform, CI&T FLOW, launched in 2023. This platform encapsulates the company's 30 years of expertise in building digital solutions, serving as a powerful engine that accelerates AI adoption and fosters enterprise-wide collaboration and knowledge sharing. By the second quarter of 2025, approximately 90% of CI&T's revenue was influenced by AI and CI&T FLOW, reflecting the platform's deep integration across its teams. Over 75% of its teams had integrated FLOW into their daily activities by Q3 2024, with over 3,000 professionals Flow-certified. More than 100 clients have embraced FLOW since its launch, experiencing immediate value creation.

The tangible benefits of CI&T FLOW are quantifiable and compelling. The platform delivers efficiency gains of over 50% across the entire digital creation cycle for major clients in industries such as insurance, retail, and consumer goods. A team utilizing CI&T FLOW can be at least 50% faster than a non-Flow team, with some content achieving 200% to 300% faster delivery. This hyper-efficiency translates into significant project cost savings, with clients reporting up to 40% reductions in project costs and an 84% reduction in hours spent on manual corrections. This superior productivity and effectiveness, driven by CI&T FLOW and its AI approach, is a primary reason for the company's expansion within its largest client accounts.

CI&T's R&D initiatives are deeply intertwined with its AI-first strategy. The company offers three core AI-powered solutions: unlocking measurable business impact with hyper-efficient teams, driving AI-led modernization, and empowering clients with a safe and compliant AI-first transformation. The AI-led modernization offering, for instance, leverages AI to greatly reduce risks and errors while exponentially accelerating modernization efforts for legacy systems, which represent a massive backlog for many clients. This foundational work is crucial for preparing clients for a future AI-driven world. Furthermore, CI&T's AI Professional Services program provides clients with a safe and compliant Generative AI platform, along with services to establish an adoption roadmap, training, and coaching programs, ensuring they can fully scale AI across their organizations. The company is also developing the "first generation of AI native coders" through its CI&T Next Gen trainee program, which plans to onboard 500 new trainees in Q1 2025. These technological differentiators contribute directly to CI&T's competitive moat, enabling higher client retention, increased wallet share, and a strong market positioning as a leader in AI-driven transformation.

Competitive Positioning and Market Dynamics

CI&T operates in a highly fragmented IT services market, where it distinguishes itself as a specialized player focused on digital transformation and AI. The company's primary competitive advantage lies in its agility and its AI-first approach, which allows it to outperform traditional IT services providers. Approximately 70% of CI&T's daily competitors are traditional IT services or consulting companies, while about 30% are other digital specialists or native players. CI&T's strong double-digit organic revenue growth consistently exceeds industry averages, underscoring its competitive position and operational effectiveness.

Compared to larger, more established global players like Accenture (ACN), Cognizant (CTSH), Infosys (INFY), Wipro (WIT), and IBM (IBM), CI&T leverages its specialized expertise and nearshore delivery model (particularly in Brazil and Colombia) to offer more tailored and efficient solutions. While larger competitors benefit from extensive global reach and broader service portfolios, CI&T's focus on customized software engineering and integrated AI solutions provides a qualitative edge in agility and speed of deployment. For instance, CI&T's GenAI-enabled processes and nearshore model for Volkswagen of America (VWAGY) are designed to enable faster updates and launches, a critical advantage in rapidly evolving markets. The company's ability to demonstrate superior productivity with CI&T FLOW allows it to replace underperforming vendors and capture greater wallet share, even against larger rivals.

CI&T's strategic partnerships further enhance its competitive standing. Its selection as one of 19 global partners in the exclusive AWS Generative AI Partner Innovation Alliance, making it the first Brazilian organization to join, grants privileged access to global business opportunities through AWS solutions like Amazon Bedrock and Nova, alongside advanced GenAI training. This partnership strengthens its technical capabilities and market reach. The company's customer dynamics are characterized by a "land and expand" strategy, where it deepens relationships with existing clients and expands its services. This is evident in the strong growth from its top 10 clients. While precise, directly comparable market share figures for all niche competitors are not publicly detailed, CI&T's strong performance in AI-driven solutions suggests a growing influence in its target segments.

Financial Performance and Liquidity

CI&T has demonstrated resilient financial performance, particularly in the first half of 2025, reflecting the effectiveness of its AI-first strategy. In the second quarter of 2025, the company reported revenue of $117.2 million, representing organic growth of 12.3% at constant currency. This marked the third consecutive quarter of double-digit organic growth at constant currency, showcasing the resilience of its business model. The adjusted EBITDA margin for Q2 2025 was 18.4%, a sequential improvement from the first quarter, driven by operational excellence and disciplined cost management. Adjusted profit margin stood at a healthy 10.4%.

Regional performance highlights include a significant 26% year-over-year revenue increase in Latin America in Q2 2025, fueled by new client acquisitions and expanded existing partnerships. North America also showed consistent performance with a solid 7% growth. The company's "land and expand" strategy is evident in its top 10 clients, whose revenue grew by 12% in Q2 2025 compared to the prior year. The high-potential client cohort (generating $5 million to $10 million in revenue) expanded from 11 clients in 2024 to 15 over the last 12 months, serving as a key leading indicator for future strategic accounts.

For the first quarter of 2025, CI&T achieved net revenue of $110.9 million, with organic net revenue growth at constant currency of 13.7% year-over-year. Adjusted EBITDA for the quarter increased by 15.2% to $19.6 million, with an adjusted EBITDA margin of 17.6%. This margin improvement was primarily driven by lower selling, general, and administrative (SG&A) expenses and reduced net finance costs. Revenue from Financial Services increased by 25% and Retail and Industrial Goods grew by 32% in Q1 2025, reflecting the company's strategic focus on industries prioritizing digital transformation.

Cash flow generation remains robust. For the first half of 2025, cash generated from operating activities amounted to $33.7 million, achieving an 82% cash conversion from adjusted EBITDA. In the full year 2024, operating cash flow totaled R$467 million, a 12.7% increase from the previous year, translating to a cash conversion to adjusted EBITDA ratio of 105%. Free cash flow in 2024 reached R$317 million, representing a 131% conversion to adjusted net income. This strong cash position provides the flexibility to invest in strategic initiatives and return capital to shareholders. On September 12, 2025, CI&T's Board of Directors approved the renewal of its share repurchase program, authorizing the repurchase of up to five million outstanding class A common shares until December 31, 2026. This program, alongside R&D investments in its AI-first transformation and debt repayment, forms a key part of the company's capital allocation strategy, aiming to prevent dilution and enhance shareholder value.

Outlook and Risks

CI&T's management expresses confidence in its forward-looking outlook, driven by consistent performance and strong commercial momentum. For the third quarter of 2025, the company expects net revenue of at least $124.4 million, representing a sequential step-up and year-over-year growth of at least 10.5% at constant currency. For the full year 2025, CI&T has narrowed its range and raised the lower bound of its revenue guidance, now expecting organic revenue growth at constant currency between 10.5% and 15%, with a midpoint of 12.75%. The adjusted EBITDA margin guidance is maintained in the range of 18% to 20%. These projections assume an average FX rate of BRL 5.50 to the U.S. dollar for the remainder of 2025, with constant currency revenue growth expected to be approximately 210 basis points above reported revenue growth.

The confidence in this outlook is underpinned by a robust commercial pipeline, which was 25% higher in Q2 2025 compared to the same period last year, strong sales conversion, and continued expansion with its largest clients in North America and Latin America. Management anticipates sequential expansion from Q2 2025 onwards, consistent with historical growth patterns. The higher end of the guidance range reflects the potential to capitalize on current commercial momentum, while the lower end incorporates a prudent approach given potential intensified macro volatility.

Despite the positive outlook, CI&T acknowledges several risks. The forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ. While the company has seen stable demand from its large enterprise clients despite ongoing macro uncertainty and discussions around tariffs, geopolitical and economic environments, particularly in Europe, can impact regional performance. Brazil's payroll taxation, which began in 2025 and will gradually increase through 2028, is a factor. However, management has proactively addressed this through productivity gains and cost-saving measures, embedding its impact into the 2025 EBITDA margin guidance. The company's M&A strategy, while opportunistic, maintains a high bar, focusing on targets that expand U.S. presence and offer clear scaling opportunities for CI&T's AI solutions, reflecting a cautious approach in a disruptive market.

Conclusion

CI&T stands at a pivotal juncture, transforming into an AI-first powerhouse that is redefining digital transformation for large enterprises globally. Its core investment thesis is firmly rooted in the differentiated capabilities of its CI&T FLOW platform, which delivers quantifiable efficiency gains and accelerates client modernization efforts. This technological leadership, combined with a disciplined "land and expand" strategy and robust talent development, is driving consistent double-digit organic revenue growth and healthy profitability. The company's strong financial position, evidenced by impressive cash generation and an active share repurchase program, provides a solid foundation for future strategic initiatives.

While the broader macroeconomic environment presents inherent uncertainties, CI&T's proactive approach to AI adoption, its strong commercial pipeline, and its ability to capture increasing wallet share from top clients position it favorably. The anticipated "tsunami of volume" from future AI-driven consumer experiences underscores the long-term growth potential, with CI&T uniquely positioned to capitalize on the shift towards custom-built software. Investors should recognize CI&T's strategic agility and technological prowess as key differentiators in a competitive landscape, enabling it to not only sustain but accelerate its growth trajectory by delivering tangible value and innovation to its discerning client base.