Good morning, everyone. Welcome to CI&T First Quarter 2022 Results Conference Call. I am Eduardo Galvao, Head of Investor Relations at CI&T. I am glad to be here again to talk about our quarterly results. Today, we have with us Cesar Gon, Founder and CEO; Bruno Guicardi, Co-Founder and President for North America and Europe; and Stanley Rodrigues, our CFO. This event is being recorded. [Operator Instructions] This event is being broadcast live and may be accessed through the company's Investor Relations website at investors.CI&T.com, where the presentation is also available. 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 and as such, are subject to known and unknown risks and uncertainties, including but not limited to, those factors described in our earnings release and discussed in the Risk Factors section of our annual report on Form 20-F and other reports we may file from time to time with the SEC. These risks and uncertainties could cause actual results to differ materially from those expressed on this call. We caution you not to place undue reliance on those forward-looking statements because 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 appendix for more details. Our agenda for today includes an update on our financial highlights and recent events, followed by some of our successful business cases and a few highlights. We'll then talk about our people and ESG strategy and deep dive on our quarterly financial results. After the presentation, there will be a Q&A session. Now, I'm pleased to invite Cesar Gon to begin our presentation.

Thanks, Eduardo. Good day, everyone and thank you for joining us today. We are excited to initiate 2022 with a strong revenue growth in the first quarter which demonstrate the resilience and consistency of our engagements with long-term clients. Digital transformation has been enabling companies to unlock its business potential, increasing sales and improving profitability. And demands for our services remain strong in all industry verticals we operate. We also have been disciplined to onboard new clients every quarter to guarantee sustainable long-term growth. And our hire machine continues to operate at full speed. That said, let's dive into our Q1 main figures. Our net revenue growth in the first quarter of 2022 was 66% year-over-year or 75% in constant currency. By the way, this is our 23rd quarter of consecutive net revenue growth. The main factors contributing to our higher growth base continue to be the expansion of our engagements with existing clients, the addition of 60 new clients in our portfolio, reaching 110 clients with annual revenue above BRL1 million and our programmatic M&A strategy. We end the quarter with more than 6.4,000 CI&Tiers, a net addition of 2.7,000 employees in the last 12 months. That's a 71% growth in our headcount. Once again, I want to express my gratitude to our CI&Tiers across the globe that have been dedicated to make this happen. Stena will deep dive in our financial results shortly. Now let's take a look at three recent power stores with new faced Audi and eDOCS, the launch of our crypto powerhouse and some additional highlights. [Video Being Played] NuVasive, a global leader in spine technology innovation sought CI&T's help in improving its sales process in Japan, a key region for the company. NuVasive partners with leading surgeons to transform spine surgery support providers to…

Thanks, Cesar. Good morning, everyone. It's a pleasure to be here with you again. We concluded the first quarter of 2022 with more than 6,400 CI&Tiers which represents a net addition of 2.7,000 employees in the last 12 months. In the first quarter alone, we on boarded around 400 trainees from the best Brazilian universities through NextGen, a program we have been running for more than two decades. In addition to that, we added around 300 people from Somo, an acquisition we concluded in January this year. Somo has teams in the U.K., the U.S. and Colombia, diversifying our global footprint and expanding our presence in strategic regions such as U.S. and Europe. We will leverage Soma's Columbia footprint as a beachhead to further diversify our talent pool and expand in Latin America. We are committing time and energy to promote a CI&T brand as an employer of choice in the region. Our goal is to be one of the most attractive companies for digital talent in that geography. We believe it has a powerful competitive advantage because of its culture alignment and time zone proximity with the U.S. market, the biggest market worldwide. Today, I'd like to comment on the working environment that we have created at CI&T which gives us a competitive edge on the supply side. The CI&T culture has been built by our people throughout our 27 years history. It is generally strong and nurture daily by our values, processes and actions. At the center is trust which unites the elements of our culture and gives cohesion to what we believe and do making it a joint construction. We foster autonomy and accountability, diversity and inclusion. We encourage our people to trail blaze new paths and build new knowledge collectively and we promote a continuous learning…

Thank you, Bruno and good morning, everyone. Nice to be here again with you. And let's dive into our first quarter 2022 figures. We ended the quarter with a net revenue of BRL491.9 million, a 66% growth compared to first quarter '21. Our most recent acquisition, Somo contributed to 10 percentage points of our net revenue growth and the net revenue in constant currency grew 75.3% in the period. This strong performance reflect our consistent net revenue retention rate that represents the revenue expansion from existing clients, combined with the addition of new logos every quarter. In first quarter 2022, we added 16 new logos that will foster the continuity of our growth in the coming years. Our adjusted EBITDA was BRL86.1 million, an increase of 26% over the same quarter last year. The EBITDA margin was 17.5% in the quarter as planned. It's worth mentioning that we have a planned seasonal effect of our results in the first quarter when we have the annual salary adjustments for employees in Brazil, while the price readjustments in our contracts occurs throughout the year. Therefore, by design, we usually have higher margins in the second half of the year. On the other hand, it's worth mentioning that seasonality in 2020 and 2021 were affected by the pandemic, changing the typical patterns in our business. Another important factor is related to our general and administrative expenses. Naturally, we've stepped up the level of our G&A expenses in connection with our IPO and the compliance required as a public company. Most of these items are fixed expenses and will be diluted as we grow during the next quarter and years, providing us an operating leverage of our margins going forward. Finally, our adjusted net profit was BRL33.5 million, a decrease of 16% compared to…

Thank you, Stanley. We are excited about the opportunities that lie ahead. Based on current market conditions and our existing engagements for the year, we are increasing our guidance for the full year of 2022. We expect our net revenue in the second quarter of 2022 to be at least BRL530 million, a 68% growth compared to our net revenue of BRL315 million in the second quarter of 2021. For the full year of 2022, we expect our net revenue to be at least BRL2.3 billion or $442 million, a 59% growth compared to our net revenue of BRL1.44 billion in 2021. This guidance contemplates 11 months of Somo acquisition, concluding late January 2022, contributing to around 11 percentage points of the revenue growth in the year. In addition, we estimate our adjusted EBITDA margin to be at least 20% for the full year of 2022. This guidance assumes an average exchange rate of BRL5.2 to the U.S. dollar for the full year. To summarize today, I would just recall that we have been expanding our growth pace in recent years based on a combination of three growth forces, a domain-driven digital strategy as a core component of our offering, our growth unit business architecture fostering a scalable and tempered organizational model and a programmatic approach for M&A as an enduring new capability focused on a flow of selective and strategic acquisitions. Digital is a secular demand in a corporate world and CI&T will continue to expand aggressively throughout this decade. We are designed for adaptability, change and innovation, either for ourselves or for our clients. Such an essential thing in uncertain times. Maybe I would say for all times. That's what we had today. Thank you all for interesting CI&T and for attending our call today. We now conclude our presentation and we may now begin the Q&A session.

Well, thank you, Cesar. We'll now begin the question-and-answer session. [Operator Instructions] First question comes from Ashwin from Citibank.

And congratulations on the good growth and revenue numbers. I was hoping to -- you provided obviously 2Q. I was hoping to get your comments on the rest of the year as well. Should we expect the margin improvement to proceed quarter-by-quarter as you spread both the SG&A increases as well as wage increases over the course of the year? Or do you expect the wage inflation environment to continue to be challenged?

Ashwin, this is Stanley. Thank you for your question. Good question. This helps to understand the seasonality typical in our business. As you said, first quarter, we have salary adjustments on the Brazil salary payroll. And exactly what happens throughout the year is we will have the price adjustments in our contracts. And naturally, our margins will step up. And in average, we have the 20% guidance that we are providing in EBITDA throughout the year. And that's exactly as we described what we expect to happen.

Understood. And then Cesar, you referred to M&A as a programmatic approach to M&A. Does this mean that having completed the couple of acquisitions here, you are becoming more comfortable with M&A as a regular contributor? And could you talk perhaps about the M&A pipeline and the available valuations?

Ashwin, thank you for your question. I think we are very excited with the -- our M&A strategy. I think Dextra and Somo are two very concrete examples that we can really speed up our organic growth adding capabilities and especially reputation in new geographies in the verticals. And I think this macro environment plays in favor of our M&A strategy and I see a strong pipeline. Basically, I see two main perspective that is our -- that is improving. One is, I think, the founders and we look carefully for very good founder-led companies. I think founders are more willing to discuss a deal or a transaction at this moment. And also, as you mentioned, I think there is more space for pricing discussions in better terms. I think both, if you combine, I think, make us very confident that we will continue our strategy of combining our main source of value creation that is organic growth with a very programmatic and, I would say, strong M&A strategy.

Our next question comes from Puneet from JPMorgan.

Quick question on demand. Cesar, I heard like relatively encouraging comments on demand environment and what you are seeing in your business. How do we reconcile that with concerns around inflation, oil prices, macro concerns broadly, how much visibility you have on sustainability of these demand trends over the next few quarters?

Thank you, Puneet. Great, see you. Well, I think you could see demand for our services remain strong. I believe uncertainty is the best soil for digital strategies and for CI&T value brought of combining strategies, design and engineering, very pragmatic way to generate results, concrete results in a very short time. I think I would like to highlight that 86% of our demand comes from large brick-and-mortar traditional winning companies and only of our demand comes from digital native players. I think also this profile give us part of the resilience we have in looking ahead and see the trends. If you look at the main verticals we are exposed to financial services, I think the competition among traditional financial institutions and I think that continue to create a lot of demand for us; we are playing both side of this battle. We see a lot of crypto and blockchain use cases around trading, custody. Well, there's tremendous opportunities on open banking, regulatory, not only regulatory but new platforms to take advantage of a whole new batch of information available. And if you go for another industry, we are growing a lot as retail. We have -- we see massive investment around e-commerce, omnichannel, marketplace strategies, use cases around combining sales journeys in-store and online, same-day delivery, online purchase of goods with pick up on store. So plan of opportunities for companies to explore digital and faster growth in search of more, I would say, complex economic environment. And data, I think data across all the industry advanced analytics, machine learning algorithms are now, I would say, a core part of any strategy around digital. And I don't see companies really reducing investment around this because this is the real future, the real way to stay relevant in the future. So I think this is, again, uncertain is the best soil for digital and we are happy to be very well positioned.

No, that's good to know. And are you seeing any changes in client priorities or how they think about outsourcing to a certain region or any region after this geopolitical issues in Eastern Europe? Are you seeing any changes in how clients outsource and seeing maybe more work coming towards Latin America as a result of that?

Yes. I think you are right. I think this geopolitical threats in Eastern Europe highlight how stable it is Latin America. And how important is the region, the whole region in terms of global sourcing of tech talent. And I think for CI&T, I think we are really, I would say, very, very competitive in the largest [indiscernible] Latin America, that is Brazil. And also, as Bruno mentioned, we are diversifying our strategy. So -- but at the end of the day, I think Latin America now is on spot for global sourcing of tech and digital and I think we can take advantage of that too.

So next question comes from Arturo Langa from Itau.

Congratulations on the results. I guess on the back of the last question. Cesar, where do you see sort of the life cycle of digital and your clients? What inning are we? And I ask this, when you walk into your clients and see their infrastructure, do you still find a lot of monolithic websites or legacy systems. And so the plumbing that you guys are constructing, how much room do you still see? How much -- how far away do you see maybe traditional brick-and-mortar companies from implementing the necessary system architectures and design practices to really be up-to-date with best-in-class sort of digital transformation journeys. Broad picture, are we still in the first, second inning? Or have you seen companies really make progress in the past years in terms of rolling out those system architectures. And I think the second one is more related to hiring. We saw an impressive number of new hires. And I think there is a sort of linearity between revenue growth and hiring. What is the pace you plan to keep that up? Should we think about an acceleration in hiring or maybe maintaining the current levels? Those would be my two questions.

Thank you. Great to see you Arturo. Thanks for the questions. I will start with the first one and Bruno can help me with the second. I think digital is really -- digital transformation is a long journey. We are seeing just, I would say, the beginning of this, really a combination of two main forces. One is maybe more visible that is the technology, the growing number of technology possibilities that companies can use. And the second trend is consumer behavior. The society is changing in such a speed that companies need to react all the time to that. That put a lot of pressure on really take advantage of the new technology possibility and try to catch up with what's happening with your customer with your consumers. And in terms of -- I would say the curve of technology adoption, it's -- we see part of the challenges, maybe the most visible part is migrate to the cloud, to establish digital architectures and process and practice that will allow you to really play digital in the right way. But there is -- this is one of the redesigns traditional companies need to face but there's two more very important redesigns. One is the management system. Companies need to operate with a completely different set of management practice, budget practices, reporting practices, the way they operate need to adapt to the digital safer. And finally, there is the leadership challenge. Companies also need to evolve in their leadership, the [indiscernible] practice and at the end of the day migrate from less centric command and control to the digital leadership, collaborative co-creation, everything that will create or foster talent to really be province at scale. I think if you combine these three major channels or three major redesigns, that's why we see more than a decade of investments around this translation of traditional winners of the 20 center to be important and relevant in protagonists in the 21st century. And now, I think Bruno could help you with the people and headcount question, Bruno?

Sorry, classic pandemic mistake, right? So thank you for the question, Arturo. Yes, you can expect the people growth to follow revenue, right? So it's a very linear relation there. We do have, on the Q1 is especially bigger because we onboard usually our training program, as I mentioned, is kind of a very common thing we do. If you remember, our strategy is to grow our own people to develop our own people. So we're kind of not focused on the senior level. So we kind of invest on junior to meet level and grow those people for us our value props for people. So we grow faster than the industry which means we promote them within and we will grow faster your career here than anywhere else. So that's a very strong value proposition. That works and it's been working for many years and it's very compelling for tech people that want to develop themselves. They want to get all new things and always be learning new things; so it's a very compelling. Attract indicators like the number of proposals accepted it's very high. It's close to 80%. So even it's a very competitive market. We continue to be very, very competitive and compelling message, right? Again, Q1 is a little higher because of the onboarding of the trainees but the rest of the year, you can see a very linear relation between revenue and people.

Perfect. And maybe just there, Bruno. With respect to the hires during the quarter, they started generating revenue in approximately how much time since hiring? I mean, maybe in other words is, where is your overall utilization rate right now due to the strong hiring? Is it a little bit below average? And should we expect that to go up?

Yes. Yes. That's, I think, as Stanley pointed out before, it has to do with the seasonality as well. So as on board, for example, 400 trainees. They would take four to six months to become billable, right? So they will be training a lot of training, a lot of our on job training. We'll be already on the teens but it will not be billable to four to six months. When we hire like a mid-level, it takes kind of 1% to 2% in seniority, probably it's almost right away billable, right. So that's the difference there and that we will see margins going up over as we go to [indiscernible].

Our next question comes from Victor Domita [ph] from Goldman Sachs.

Two questions from us. The first is, if you could give us some more color on how the early stages of the integration of Somo are going and how the initial contact with their clients are going. And our second question would be how you believe your guidance for margins could change if the U.S. dollar exchange rate remains at lower levels, maybe closer to the current level of BRL5 rather than the BRL520 assumed in the guidance if that could be a relevant change

Well, I can start with Somo question. I think, of course, there's a very low hanging fruit on presenting the scale and global wide set of capabilities of CI&T to the current portfolio of Somo and we are doing that. We are starting to really operate with their customer in different geographies and with different capabilities. And of course, there is also the opportunity, I would say, more mid to long-term opportunity of leverage their vertical expertise, some is very specialized on the auto and utility industries, especially in U.K. and we can leverage this vertical expertise in other regions we are operating. So I think so far, we see this really working very well. I think we could see Somo continue to support and really deliver the excellent quality of services they provide for their customers and also now have the global opportunity of participating in the CI&T platform to really speed up growth in terms of the range of services and capabilities available. The second question, I think Stanley can address that, right?

Yes. Victor, with regard to margins going forward because of FX. As you can remember, our guidance is based on a 5.2% FX going forward. And a good proxy for you to understand the dynamics is for each $0.40 in the exchange rate variation, we will see one percentage point of variation in our EBITDA. So this is a good reference for you to understand the variations going forward.

Our next question comes from Jason from Bank of America. So we do have some questions from e-mail which we covered most of them. So let me get one here that we received from one investors -- one investor. In terms of geographic diversification which region is growing faster and where do you see more opportunities? In other words, where do you expect your revenue breakdown to be in the next three to five years? So Cesar, do you want to comment on that?

I can comment on that. I think now we have Jason. Well, basically, we are -- organically, we see, of course, our main source of growing coming from the U.S.A., the largest market for digital and where we are very well positioning. And also, we see now Europe with a very good trend, especially now that after we acquired Somo and so we see also a lot of demand coming from Europe in the following year. So basically, what you should expect as now we are forecasting ending this year with 56% of our revenue comes from developed countries or hard currents. So -- and this will gradually increase as we are growing faster in these regions. So -- now we have Jason.

I wanted to ask about coming back on the wage inflation point. Do you guys expect to be able to pass 100% of the wage inflation on to your customers during the course of the year? And then, can you also just comment on voluntary employee attrition in the quarter and how that trended versus the prior quarter?

I'll take that one. So the wage inflation, just to point out that it's not an issue, it's a known issue for Brazil operations, right which fortunately or unfortunately, it's already part of the culture. So it's already regulated by contracts. So it's only issue for developed markets, right. And yes, we do expect to, over the year to pass that along. So we still see, as Cesar mentioned before, like it's a very strong market in terms of demand and the shortage of supply. So that creates a lot of elasticity for companies like CI&T. So -- and we are very privileged position as a specialist in this market to kind of capture that value. So yes, we have some seasonality. So this is happening now and it's an uncommon topic conversation with clients but that's going to happen, it's happening everywhere in the industry and that's going to pass on to prices. Your second question, sorry, was regarding attrition?

Voluntary attrition, yes.

Yes, attrition is a little higher than our historic levels but still in a very healthy place 16%. Most of the bump there was a little more competitive market in M&A. So the Soma and Dextra had a little higher attrition so we kind of add up to the historic 12% attrition in CI&T. But we're still very comfortable there, very, very confident that the most important attrition number that we looked at is actually leadership attrition and that number is on the 4%. So that's very important because that's our ability to remain projecting very solid growth, our leadership in all levels that actually guarantee the quality of our delivery and ability to continue to grow and develop our own people. So that's a very -- it's a very solid number of 4%. So we trust now ability to maintain that healthy retention rate and we continue to provide a very compelling value proposition to our people.

Maybe just one quick follow-up. Just on the revenue guidance raise for the year. Would there be one or two callouts there that are primarily driving that, either by vertical, by geography? Just curious where the main source of the upside is coming from?

I can get this is one. I think the main verticals for us, the growth is happening in financial services, retail, TMT and consumer goods, basically, I think are the major source of growth for us. And as I explained, I think digital is a fundamental source of competitiveness and growth in these verticals.

Mostly demand coming from our traditional companies, right? So the brick-and-mortar cluster there that's kind of really driving the growth.

Yes. Perfectly, Bruno. I think just we mentioned we are operating with a very high [indiscernible]. Last year was 128% and this year will be even higher. I think this demonstrates how solid is our portfolio of customers and our main source of growth.

We have a follow-up question from Arturo from Itau.

I think just on the back of the question regarding hiring. I saw some expansion to other LATAM countries, I think Colombia stood out. Just to think about expansion from a headcount perspective to other countries in the region, where should we think about that maybe in one to two years looking forward in terms of percentage, right? Where do you expect to be in terms of headcount diversification within the region? That would be useful.

Thank you for the question, Arturo. So you can think of a gradual diversification towards other countries in Latin America that are not Brazil, right? So we, of course, were not kind of trying to run away from our leadership position in Brazil. Brazil will continue to grow strong. But we will diversify Colombia. It's a great addition, right? So it's a great beachhead we got from the Somo acquisition. And then, now we're going to leverage to make it way bigger to support the overall science business is. And that's going to happen with other great sources of talent in Latin America. So we think -- we will see that diversification happily gradually and steadily in the next two, three, five years.

All right. So that concludes our Q&A session. Thank you all for attending our event today. I now would like to invite Cesar to proceed with his closing remarks. Cesar, please.

Thanks, Eduardo, Stanley, Bruno for joining me today. Thank you all for participating in our call. As you noted, demand for our services remain strong and we are very confident we will have another strong year. Again, I want to thank all CI&Tiers, clients, investors and partners for their continued support. And of course, I'm looking forward to see you all in a couple of months. Bye.

Thank you all. Bye.

Thank you.

Thank you very much.