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CI&T Q1: Digital Transformation Driving Growth Now And Into The Future

Joseph F. Kovar

‘Our clients are trying to engage their own customers and users digitally. Some compete with digital natives, and are being forced to move faster. They are feeling the heat to transform. We have retailers who compete with Amazon looking to leverage digital to reach their customers. And we have customers like Budweiser who may not sell direct to consumers but who reach consumers digitally,’ says CI&T co-founder and President Bruno Guicardi.

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Growing digital transformation requirements for customers around the world made for a very good fiscal 2022 first quarter 2022 for CI&T, a global solution provider focused on digital transformation.

CI&T, founded in Brazil in the 1990s but with global headquarters now shared with its New York office, this week reported strong growth in revenue and earnings that reflected the company’s focus on helping clients digitally transform their operations, said CI&T co-founder and President Bruno Guicardi.

“This is a market with a lot of demand for digital transformation services,” Guicardi (pictured) told CRN. “This is probably the fastest-growing category in technology services. There are probably a half-dozen companies in this category. Everybody’s growing. We’re growing fastest. We’re the fastest among the very fast.”

[Related: CI&T President Bruno Guicardi: ‘We Help Clients Reconfigure Themselves For The Digital World’]

There is still a lot of demand from customers looking to become digital-native companies, Guicardi said.

“Our clients are trying to engage their own customers and users digitally,” he said. “Some compete with digital natives, and are being forced to move faster. They are feeling the heat to transform. We have retailers who compete with Amazon looking to leverage digital to reach their customers. And we have customers like Anheuser-Busch InBev who may not sell direct to consumers but who reach consumers digitally.”

The majority of employees of CI&T, which went public in November on the New York Stock Exchange, are based in Brazil where the company has leveraged local talent to help serve clients around the world.

Prior to the IPO, CI&T completed three acquisitions, including one company in the U.S. CI&T in January used some of its proceeds from the IPO to acquire Somo Global, a U.K.-based digital product agency.

Organic growth has been more important than acquisitions for CI&T’s growth, Guicardi said, but more acquisitions are expected.

“We will do more acquisitions,” he said. “It was part of the plan for the proceeds from the IPO. We will hopefully complete a couple more before the end of the year. But like we say in Brazil at soccer games, ‘You can’t say the game is done until the final whistle.’”

Given how fast the digital transformation business is changing, CI&T’s business looks like a shape shifter, Guicardi said.

“We don’t see change necessarily every year, but in five years we’ll see us completely changed,” he said. “For instance, we’ve starting working with NFTs, crypto, and blockchain for clients supporting the crypto side of business.”

For its fiscal 2022 first quarter, ended March 31, CI&T reported revenue of $99.7 million, up about 66 percent from the $60.1 million the company reported in the first fiscal quarter of 2021. Sales in North America accounted for 41.9 percent of total revenue.

CI&T also reported adjusted EBITDA of $17.5 million, with an adjusted EBITDA margin of 17.5 percent, up about 25.9 percent from last year’s EBITDA of $13.9 million, or an adjusted EBITDA margin of 23.1 percent.

While CI&T is listed on the New York Stock Exchange, it reports its financials in Brazilian reals. U.S. dollar amounts in this story were calculated based on Thursday’s exchange rate. Rather than GAAP, the company reports using IFRS, or International Financial Reporting Standards.

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