On Tuesday, CI&T (NYSE:CINT) discussed second-quarter financial results during its earnings call. The full transcript is provided below.

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The full earnings call is available at https://www.youtube.com/live/zD7UWCeZCag

Summary

CI&T Inc delivered record revenue of $142.8 million in Q2 2026, marking a 21.9% organic increase, with broad-based growth across geographies and sectors.

The company focused on AI deployment and monetization, with new value-based pricing models leading to an adjusted gross margin increase from 30.6% to 32.4%.

CI&T Inc's adjusted EBITDA margin was 13.3%, reflecting strategic investments in growth, with a 40% increase in the sales pipeline year over year.

The company expects Q3 2026 revenue to reach at least $145.7 million, raising full-year guidance to $566-$578 million, implying 15.5%-18% organic growth.

CI&T Inc highlighted strategic partnerships, including joining Anthropic's Claude Partner Network, and emphasized the role of AI in transforming client operations.

Management discussed the transition to new pricing models, with 40% of new sales in H1 2026 under these models, contributing to expected gross margin improvements.

Operational highlights included reskilling 100% of employees for AI, maintaining low voluntary attrition, and significant growth in revenue per AI builder.

Full Transcript

Eduardo Galvan, Director of Investor Relations

Good afternoon and thank you for joining us for CI&T Inc second quarter 2026 earnings call. I am Eduardo Galvan, Director of Investor Relations. Joining me today to discuss our quarterly results are Cesar Gon, our Founder and CEO, Bruno Gicardi, Founder and President for North America and Europe, and Stanley Rodriguez, our CFO. Before we begin, I would like to remind you that our remarks today will include forward-looking statements. These statements, including our business outlook, are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially.

We caution you not to place undue reliance on these forward-looking statements as they are valid only as of the date made. Additionally, we will discuss certain non-GAAP financial measures. We believe these provide a more comprehensive view of our underlying operational performance. For a full reconciliation of these measures to the most directly comparable GAAP metrics, please refer to the tables in our earnings release. Today's session is being recorded and all participants are currently in a listen-only mode.

Following our presentation, we'll host a Q&A session. To participate, please submit your question via email to investorsint.com. The full presentation deck is available on our Investor Relations website and a replay of this call will be posted shortly after we conclude. With that, I'm pleased to hand the floor over to our Founder and CEO, Cesar Gon.

Cesar Gon, Founder and CEO

Thank you, Eduardo, and good afternoon everyone. Global AI spend is projected to hit $2.6 trillion this year, up 47% year over year. And yet, according to MIT, roughly 95% of AI initiatives still show no measurable business return. That gap is where I want to begin today. We published two papers this quarter that get at why. The first argues that most companies are optimizing the wrong variable, chasing incremental task efficiency instead of asking where I can return 10 times rather than 10%.

The second paper calls it organizational hallucination, the confident belief that a company is transforming when it's actually just experimenting. In both cases, the constraint was never the technology; it's the organization's capacity to absorb it. That gap is exactly where CI&T plays, and it's why we build our business around two: AI deployment, installing real capability inside a client's core; and AI monetization, capturing together with our clients the productivity gains and business impact that AI deployment creates through value-based commercial models rather than headcount.

Everything you will hear from us today—the robust and sustaining revenue growth and the increase in our sales investments to foster momentum, given the AI opportunity—is the same thesis playing out inside our own business. This quarter's numbers reflect that opportunity and the deliberate choices we're making to capture it. We delivered record revenue of $142.8 million, up 21.9% organically and above our guidance, broad-based across geographies, industrial verticals and client cohorts.

Growth was increasingly fueled by new client wins and by initial engagements scaling into large partnerships. Our new commercial models are also letting us capture a greater share of the value we create. That shows up directly in adjusted gross margin, which expanded from 30.6% in the first quarter to 32.4% as these models scale. In the first six months of 2026, 30% of new engagements were under new value-based pricing models and we project this gross margin expansion to accelerate in the coming quarters.

Our adjusted EBITDA margin this quarter was 13.3%, reflecting our deliberate choice: 2026 is a transition year—one where we invest in our commercial engine to turn this AI deployment opportunity into durable, profitable growth in 2027 and beyond. As a result, our commercial pipeline is now 40% larger than in the first half of 2025. In short, our top line shows that demand is solid, our gross margin shows monetization is working, and this year's commercial investment is what lets us compound that advantage going forward.

And here we go again. The second quarter of 2026 marks our seventh consecutive quarter of double-digit organic growth. At a time when parts of our industry are consolidating through acquisitions—buying growth rather than building it—we've extended this streak without a single M&A deal, prioritizing our capital allocation toward our own transformation and our sales effort and growth engines. This embodies one of our cultural values: we play the infinite game.

We are not optimizing for a single quarter. We are building a company designed to keep compounding for decades. This consistency reflects a structural shift in client demand and CI&T's ability to capture it. The case studies that follow show how this AI deployment momentum is translating into tangible business outcomes. These case studies demonstrate how our agentic SDLC and CI&T Flow are resetting the baseline for enterprise productivity and speed to value. I will now hand over to Bruno to discuss how we are scaling this hyperproductivity through our global delivery model and our evolved talent strategy.

Bruno Guiccardi, President

Thank you, Cesar. Good afternoon, everyone. I'm glad to share our operational and talent progress for this quarter. We closed Q2 2026 with roughly 8.1 thousand professionals, with voluntary attrition at 10.1% continuing to trend toward some of the healthiest levels in our history. At the center of this workforce are our 6,700 AI builders, the result of reskilling 100% of our professionals to work AI natively. That matters right now. Recent independent research mapped a widening gap in the market for AI deployment talent.

With demand for engineers who deploy AI at enterprise scale growing roughly 50% year over year, most of our industry is racing to hire into an increasingly scarce pool of talent. We didn't have to; we built it from within ahead of the market. Revenue per AI builder continues to grow, reaching over $80,000 in Q2 2026 on a last 12‑month basis, an increase of 7% year over year. This is a direct result of AI monetization and value‑based pricing providing operating leverage and contributing to the expansion of our gross margin.

Our momentum is being reinforced by a strategic partnership we announced this quarter, one that speaks directly to the role CI&T Inc plays for large enterprises. We joined the Anthropic Cloud Partner Network, certifying more than 1,000 AI engineers on cloud and working with Anthropic to help set a new standard for how AI gets deployed inside the world's largest organizations. CI&T Inc already runs cloud code extensively inside CI&T Flow, and this partnership expands that work into a joint go‑to‑market motion with a focus on co‑developing industry solutions for financial services, retail, and consumer goods, among other verticals.

It is designed to open new enterprise accounts and expand our pipeline into verticals we're co‑developing, directly feeding our commercial momentum. Large enterprises need a partner who can take frontier models into complex, regulated, mission‑critical environments and deliver production‑grade outcomes. That deployment layer is exactly where CI&T Inc operates. And this partnership makes us the connective tissue between the leading model providers and the world's largest organizations.

That embedded engineering capability is exactly what enables us to play where the real value is shifting in the AI era. This chart from Forrester is the clearest way we've found to show clients why. Most of what's been sold as enterprise AI so far sits on the left side of this chart: automating individual tasks with copilots and agents, augmenting existing workflows end to end. It's a productivity story—efficiency gains on top of an operating model that stays the same.

The disruption is what Forrester calls the process chasm. Cross it and the business case changes entirely, from efficiency to new revenue and margin structures, and ultimately to growth, relevance, and the long‑term perpetuity of the business itself. CI&T Inc built two offerings specifically for the two quadrants on the right side of that. Jasmine, the one I want to walk you through now, the one gaining the fastest traction with our clients today, is Agentic Enterprise Reinvention.

Agentic Enterprise Reinvention is how we help established enterprises redesign the core of their operations, moving from legacy ways of working to agentic‑native operations. We don't stop at advisory or isolated use cases. We install real operational capacity inside existing value streams, and we stay until it runs on its own. In practice, that means bringing 60 to 80% of a core end‑to‑end process onto an agentic journey in months. Three things differentiate this from traditional systems integration: who delivers it—small, senior, forward‑deployment engineering teams; how we find the value—three decades of lean‑based process transformation along with our industry expertise give us the insight into where reinvention pays off; and how we get paid—increasingly outcome‑based, with fees tied to business results, not to hours billed. And it compounds. Once we reinvent one core process, it becomes the reference architecture for the rest of the enterprise, giving every account a natural land‑and‑expand path.

That means revenue that scales with the impact we create for clients, not with headcount. Now I will hand it over to Stanley to comment on our financial performance.

Stanley Rodriguez, CFO

Thank you, Bruno, and good afternoon, everyone. Let me walk you through our financial results for the second quarter of 2026. As Cesar mentioned, we delivered record net revenue of $142.8 million, up 21.9% year over year, entirely organic, and 14.1% at constant currency, above our guidance of at least $140 million. This performance reflects the strength of our go‑to‑market execution. Through the quarter we saw our sales pipeline expand and our conversion rates improve, the direct payoff of deliberate commercial initiatives and the tangible results our AI deployment delivers for our clients.

Beyond the headline number, what matters is how evenly this growth is spread across our footprint. This slide shows the composition of our growth, and the message is our momentum is not carried by any single vertical or client. Every region contributed. Latin America was the largest engine, expanding 32.1% year over year. New markets grew 26.3%, and North America added a consistent 10.2% on a large, mature base. Financial services, our largest vertical, continued to grow strongly, up 36% year over year.

Technology and telecommunications accelerated to 68% growth, a robust turnaround from the contraction we saw just a year ago. Others grew 25%, life sciences 16%, and retail and industrial goods 11%. The one exception is consumer goods, where demand has been softer—a headwind we view as temporary. The composition by client cohort tells an equally healthy story. Clients outside our top 10 grew 24.1%, outpacing the 19% growth of our top 10, reinforcing that our momentum is not dependent on any single account.

Taken together, this confirms that our AI deployment is a global catalyst, driving deeper penetration across every region and every client tier we serve. As you may recall from our last quarter's call, we said that as our new engagement models gained traction, they would begin to expand our gross margin, and that is exactly what we are seeing this quarter. Our adjusted gross margin expanded sequentially from 30.6% in the first quarter to 32.4%, an increase of 1.8 percentage points, as those models lift the value we capture per engagement.

That said, on a year‑over‑year basis, adjusted gross margin declined, driven by a foreign exchange headwind, as our productivity gains offset the impact of the payroll tax resumption. Looking ahead, we expect gross margin to continue improving over the coming quarters, and as adoption of these models broadens across our book of business, a core driver of the profitability expansion we are working toward. Adjusted EBITDA was $19 million, with a 13.3% adjusted EBITDA margin.

The year‑over‑year compression reflects two main factors. The first is the appreciation of the Brazilian real against the U.S. dollar, which we have flagged before. On an FX‑neutral basis, adjusted EBITDA would have been $20.8 million, a 15.6% margin, giving a clearer view of our underlying performance. The second factor is deliberate, and it reflects two distinct components related to our sales efforts. Part of it is a targeted investment specific to 2026, including scaling our agentic SDLC initiative to capture the current acceleration in demand for AI deployment.

This is not a permanent addition to our cost base. The other part is structural—an expansion of our commercial organization to support new offerings, practices, and vertical initiatives, as well as commission expenses—which will remain part of how we go to market going forward. Together, these investments are funding the 40% pipeline expansion year over year, as Cesar mentioned, and higher conversion rates already showing up in our top line. This is a conscious trade‑off between near‑term margin and durable, higher‑quality growth.

Importantly, the underlying trend is encouraging. Our adjusted gross margin expanded sequentially, showing that the pressure at the EBITDA level comes from our deliberate investments and external headwinds, not from our core delivery economics, which are in fact improving. Looking ahead, we expect our adjusted EBITDA margin to improve sequentially, while these investments position us to fuel growth into 2027 and beyond. Moving to our bottom line, adjusted profit was $8.7 million in the second quarter, with a 6.1% margin.

This reflects the same two main factors I just described: the appreciation of the Brazilian real and our deliberate investment in growth. Adjusted diluted earnings per share was $0.07 versus $0.09 in the prior year. We see this as an investment cycle, not a new baseline. As these investments continue to fuel our growth into 2027 and beyond, we expect profitability to recover and our capital discipline to keep amplifying returns for shareholders. This quarter, that discipline included repurchasing $2.8 million in shares, continuing our ongoing buyback program even as we invest in growth.

Combined with these repurchases, our weighted average diluted share count is down 3.6% year over year, meaning each remaining share now carries a larger claim on our future earnings. I will now turn the call back to Cesar to discuss our business outlook and the strategic path forward for the remainder of 2026.

Cesar Gon, Founder and CEO

Thanks, Stanley. We continue to see an improving demand environment as enterprises increase their spending on AI deployment, and we are pleased with the evolution of our AI monetization efforts through new value‑based commercial models. For the third quarter of 2026, we expect revenue of at least $145.7 million, a 14.4% increase over the third quarter of 2025, or 12.3% at constant currency. For the full year, we are raising our revenue guidance to the range of $566 million to $578 million, implying organic growth of 15.5% to 18%.

Our revised outlook includes a positive FX impact of approximately 400 basis points. Alongside that, we now expect adjusted EBITDA margin for the year in the range of 15% to 17%, reflecting deliberate investment in the commercial engine that drives demand and accelerates monetization. With sequential margin improvements through the second half as planned, this is a forward‑leaning choice to move first on AI deployment and expand our wallet share.

And to be clear, this doesn't trade away financial discipline. Profitable, cash‑generative growth is still the bar we hold ourselves to. What we are building is a company that scales revenue with less headcount and grows more profitable as the new commercial models mature. With that, we are ready to begin the Q&A session. Thank you.

Eduardo Galvan, Director of Investor Relations

All right, we'll now begin the Q&A 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 Pune Jain from J.P. Morgan. Hi, Pune.

Pune Jain, Analyst at J.P. Morgan

Hey. Thanks for taking my question. I want to follow up on margin guidance. Like the cut of around 200 basis points, like I understand, like a lot of it's discretionary investments and then currency. Can you break down that impact for us? How much of the incremental impact is FX versus investments, and why should we expect the level of investments to go down? We're still in very early stages of AI buildout, AI ramp‑up. Why won't this level of investment stay where it is into next year and beyond?

Stanley Rodriguez, CFO

I may start here. Puneet, thanks for the question. Let's take the full picture here. If you see year-over-year double-digit growth, growing four times faster than our peers, we are gaining market share, we're gaining wallet share, which means we are deepening relationships with our clients. We have this broad-based growth. You see growth in the top 10 clients, outside the top 10 clients. You see growth in all the regions. You see growth in most of the segments except by one.

And everything is pure organic. We have a pipeline growing 40%. So everything is funded by these investments that we've been making ahead of the pack. And specifically in this second quarter, it's an answer to this surge in demand for AI deployment. Then we reshaped and redesigned our go-to-market. And that's what you see in the second quarter. Going forward, we see part of this investment we are reducing along throughout the quarters, which is specifically the Agentic SDLC deployment.

But the other half, I would say, we will continue to see there. So it's more structural. So if you see from last year's quarter sales, it's 8% of net revenue and this quarter we are talking about 12%. So going forward we will be pretty much in between and this will be more than compensated by what you see in the gross margin as this will continue to improve. And also we will have operating leverage on top of SG&A as a whole, sales as well. And as a consequence that's why you see EBITDA growing, and everything already counting on this deep pressure from the FX.

Everything's compounding there.

Pune Jain, Analyst at J.P. Morgan

Got it. That's helpful. And then on your top line, it seems like the financial services vertical is doing really well, including the top client that's up nicely sequentially in this quarter. So how broad-based is that growth in financial services, and your expectations for the rest of the year there for that vertical?

Cesar Gon, Founder and CEO

Sure, I can get this one. You're right. Financial services was the second-fastest vertical for us. We grew 36% year over year in financial services, but we grew across the board. Retail 11%, tech and telco 68%, life sciences 16%. By the way, only consumer goods minus 9%. So it's solid growth around all the not only verticals, but if you look at our top 10 clients, even if you exclude our top one client, it's still very high growth, 16% year over year among the top 10, excluding the top one that grew solid too.

So basically we will continue to see—we are forecasting expansion across the board in all the verticals in the top 10 clients and also the whole cohort of clients. I think what is behind us is a solid increase in AI deployment demand and also the fact that I think we did all the investments to capture this momentum, as is mentioned, in our sales organization. So we expand verticals reach across the board to really speed up growth and increase the wallet share in our portfolio and also increase the land in new clients.

I think it's the second time we are raising our revenue guidance, and we continue to see growing demand and it's basically across the board. Of course, financial services will continue to be our number one vertical. I think the use case for efficiency and customer experience in financial services, especially in the banking sector, is becoming very clear now in terms of impact. But we see also other verticals evolving, like retail with agentic commerce will be a big trend and is already starting.

Every single industry will have a set of very powerful use cases to explore. So we are preparing our offerings and teams to capture that.

Stanley Rodriguez, CFO

Just to add to that, financial services grew 36% year over year while our top client grew 27%. So if you exclude the top client within that vertical, the other clients grew faster than that, even higher than the 36% we see here.

Pune Jain, Analyst at J.P. Morgan

Got it. Yeah. I was looking at it on a sequential growth basis and it was up nicely at the top client as well as the rest of financial services even on sequential growth. But I understand. So appreciate it. Thank you.

Eduardo Galvan, Director of Investor Relations

Thanks, Pune. Thank you, Pune. Our next question comes from Steven from Wedbush. Steven, please go ahead.

Steven, Analyst at Wedbush Securities

All right, thanks, guys. Thanks for taking the question. I want to start on the Agentic SDLC that you guys pointed out in the quarter. I want to ask specifically about the pipeline that you're seeing there because you mentioned that you saw 40% year-over-year growth in the pipeline, but what percentage of that was specifically tied to Agentic SDLC? And does this carry any higher average deal sizes? And can you talk a little bit about the metrics there?

Cesar Gon, Founder and CEO

Sure, I can start. Bruno, you can jump in. Well, I think roughly 35–40% of our demand we articulate as Agentic SDLC, especially transforming the current engagements we already have. So old traditional digital engagements now being reshaped as Agentic SDLC engagements with different commercial models and different margin profiles too. So this is one specific offering where we are very, very competitive. I think we are five to ten times ahead of our typical competitor.

So we have a lot of space for replacing underperforming competitors, and I think the gap is increasing. We have been investing with CI&T Flow and all the reskilling of our teams a lot in the last three years, and I see the gap of performance versus our competitors increasing. That gives us a lot of room for replacing on our clients and also land on new avenues of growth. So—and the second question, we're sorry—

Steven, Analyst at Wedbush Securities

Specifically on the deal sizes for Agentic SDLC versus your traditional deal sizes.

Cesar Gon, Founder and CEO

Yeah, we are seeing an increase in the deal size. We are not sure if it's a trend or just momentum, but we see in the last two quarters the size of the deals are larger. But we are not sure yet if it's just a transition from previous procuring model or if it's a long-term trend. We disclosed the number: we have a 40% larger pipeline versus the same period last year, and with a very solid conversion rate. So the deals are larger now, but not sure yet if it's a trend.

Depends on how the market evolves.

Steven, Analyst at Wedbush Securities

Okay, got it. And if I can ask a quick follow-up, because I want to ask about the geographic split moving forward, because Latin America was another solid quarter of growth at 32%. If you look at North America though, it was a 600 basis point deceleration from 1Q26, where last quarter was 16% and this quarter was 10%. Is there anything to point out there from a demand perspective? Is there any sort of competitive displacement happening there? Anything that you would want to point out specifically within North America?

Bruno Guiccardi, President

I think this one is known—just seasonality, Steven. I think you can expect that to be accelerating again throughout the year. So I think it was just Q2 seasonality. You know, some gaps in contract renewals and other situations were kind of ad hoc. Nothing systematic.

Steven, Analyst at Wedbush Securities

All right, appreciate the time. I'll hop back in the queue, thanks.

Eduardo Galvan, Director of Investor Relations

Thank you, Steve. Our next question comes from Brian Peregrine from TD Cowen. Hi Brian, please go ahead.

Brian Peregrine, Analyst at TD Cowen

Hi, guys. Thank you. I wanted to ask on tech and telecom—so really strong growth number there in the quarter, the second consecutive really strong growth number. So I guess first, is this being driven by a handful of large transformation wins, or are you seeing broader demand there in the client base? Maybe just give us more detail on what's driving that, because there have been some peers that have had more challenging results in that vertical. And how should we think about that going forward as we go through the second half?

Cesar Gon, Founder and CEO

Sure, sure. Thanks, Brian, great to see you here. First is telco. I think we have some big telcos as clients and we are getting a lot of traction with them, especially around Agentic SDLC. And again, it resonates with, I think, the level of differentiation we are being able to showcase in terms of productivity. The second is a new trend, because we combine tech and telco, but it was majority telco historically. CI&T was not—we don't have really a lot of demand from the tech companies, but it's happening now.

I think it's also correlated with the AI deployment demand. And so now we have some big tech companies increasing their spending with us. It's also correlated with the partnerships we are announcing—probably you saw not only the typical hyperscalers, Amazon, Google, Microsoft, but also the new big players, especially Anthropic. So it's a new revenue source for us, and we are very happy to see this also adding to our growth.

Brian Peregrine, Analyst at TD Cowen

Okay, understood. And then just a follow-up on the margin recovery path. So, to achieve that full-year EBITDA margin target, it looks like you'd have to meaningfully improve from just over 14% in the first half. So can you just categorize what are the biggest drivers of that improvement as you go through the second half? How much is coming from, you know, commercial model benefits versus moderating investment spend versus potentially moderating FX headwind?

Stanley Rodriguez, CFO

Well, Brian, thank you for the question. I may start here. And Bruno, if you may add. Again, if you see, Brian, as a comparison, for example, we have a 2.2, more or less, percentage point effect from the FX if you compare to second quarter '25. So pretty much we are in line there. And that includes our efficiency gains that compensate the tax resumption in the payroll in Brazil. So you see their efficiency gains rolling right, going forward. What we have—we continue to see conversion, more and more conversion, of the new models that have higher margins playing at the gross margin level.

So at the gross margin level you will see improvement sequentially. Going down the P&L, we will see operating leverage on top of SG&A and in sales specifically, as we don't have, in the coming quarters, the Agentic SDLC investment component that we saw heavier in the second quarter. You will see an alleviation there. Of course, we do have a structural sales part that will remain there. But again, the combination of better gross margins and the operating leverage will bring the EBITDA sequential improvement that is implied in the guidance that we provided.

Bruno, if you could add more color.

Bruno Guiccardi, President

I'll just say that the seasonality of the sales investment that was done in Q2—that will start to drop kind of halfway. Right. So from the 8 to 12 percentage points on the revenue, right? So if you look at where we were last quarter, it's 8%. Now we're 12%. We think we're going to see, long term, around 10. So that's another 2%—probably not in Q3, but certainly for the long run. Right. So that kind of peak will recede a little bit.

Brian Peregrine, Analyst at TD Cowen

Okay, understood.

Eduardo Galvan, Director of Investor Relations

Thank you. Thank you, Brian. Our next question comes from Maria Clara from Itaú. Hi Clara, please go ahead.

Maria Clara, Analyst at Itaú

Hi everyone. Thanks for the opportunity. I have two questions here. So the first one, more color on the increase in pipeline: can you please comment which industries have been outperforming, if you already see a trend of new clients gaining more traction, and also if you could please comment about the evolution of the new monetization formats within those new potential deals? And the second question is a follow-up about the gross margin expansion stage.

Stanley just mentioned that those new monetization formats are already helping the gross margin expansion. So can you please elaborate more on that—what is the profitability boost here coming from those models and the profitability expansion potential in the long run? Thank you.

Cesar Gon, Founder and CEO

Sure. Let me start with your second question. We basically are introducing four new price-based models that are fixed price with higher margin, output-based, a kind of throughput model, price per consumption, and then outcome-based. This model will depend on the way we combine, giving us 3 to 15 percentage points higher than the traditional time and material. So it depends on the mix; we have something in this range. So it's a very significant improvement in our contribution margin.

And as I mentioned, 40% of everything we sold this year was already based on this new model. And as we execute these contracts, that's why we are foreseeing this expansion in gross margin, and our efforts are showing that this trend of increasing the new commercial models in our engagements will continue. So this is what we are working on, and we believe that this is a better way to play the AI deployment game and really align the purpose of the engagements with our clients.

And we are seeing a lot of good reception from our clients. So this is—I think I gave you a range on what we are expecting as an improvement and an incremental improvement in gross margin ahead. How we see the demand and the pipeline expansion. We are putting everything under this AI deployment umbrella. We can group this demand in three set of offerings. The first is adoption. AI adoption is a big trend, particularly when we see opportunities around the software engineering agency SDLC, as we mentioned—a lot of productivity gains to be captured and speed to value to be captured, just reinventing the ways of work in the digital software space.

The second is our IP-based solutions. That is things like our modernization studio where we can streamline the conversion of a legacy system into modern AI-based architecture. The same for data. Data is a huge demand for us regarding preparing our clients for the AI age, reducing the fragmentation, and creating the right infrastructure around data. And then you have the specific use case by industry—efficiency or customer experience. I mentioned before some for financial services; there is retail. And for every single industry we now see a set of powerful use cases to explore. And finally, I think what is new—probably what I mentioned is 85, 90% of this increased demand—and we have a new trend in our pipeline that Bruno mentioned during the call. We’re launching the enterprise reinvention services, a new line of services, very transformative, where we help our clients not just improve current workflows but really reinvent core processes around AI.

And this is always an outcome-based engagement. So this is a new trend, and probably we will see this being more relevant in the future in our pipeline. So basically AI deployment in these three groups.

Bruno Guiccardi, President

If I may add, I think we're very excited with the consumer experience element there that Cesar mentioned. Because if you're hearing those calls, for the last two years we've been telling a lot that this will come. So the first phase of AI demand was solely focused on efficiencies and operational excellence—so only internal, where the user of AI was only our clients’ employees. And now we're seeing the first kind of big-scale programs geared towards consumers and customers of our clients, which is very exciting for us because this is a completely new type of demand that we predict will be exponential as clients build more confidence into the models and the results that they're getting. This is a new kind of tsunami of demand that will come, and will come for the ones that are better positioned. And I think we are the ones actually being very successful with those initial workstreams with the internal implementations and kind of positioning ourselves very well to actually take on this new one that's upcoming and with a lot of potential for growth.

Maria Clara, Analyst at Itaú

So just a very quick follow-up on that. Bruno, do you foresee any sign of potential acceleration from these next step of AI revenues potentially in 2027?

Bruno Guiccardi, President

I think this area of consumer experience has a lot of potential for exponential growth. Right. And again, as clients get more confident about the results and exposing those experiences and embedding agentic into the consumer customer experience, that has a lot of potential for growth.

Maria Clara, Analyst at Itaú

Thank you. Very clear.

Eduardo Galvan, Director of Investor Relations

Thanks, Clara. Our next question comes from Gustavo Diaz from UBS. Hi, Gustavo.

Gustavo Diaz, Analyst at UBS

Hi everyone, and thanks for the opportunity. So two questions. First one on the AI deployment demand: I’d like to unpack it—if you could share color on how much of it is AI deployment per se versus the legacy modernization required for this AI deployment, and how much of the guidance raised was supported by those new partnerships with Anthropic and Mistral that you announced recently. My second question, just to follow up on the margin outlook: first of all, I wanted to confirm if these investments in agentic SDLC are mostly concentrated in the second quarter.

And, most of all, how do you think of this structural expansion in the commercial department—if it's a multi-year effort, or if we could expect normalization to happen next year? Thank you.

Cesar Gon, Founder and CEO

Thanks, Gustavo. I'll start with the first one. It's roughly 30%. We put legacy modernization and data modernization inside the AI deployment umbrella because these are foundational investments large companies need to do if they want to fully explore the reinvention potential of AI. So 30% is toward this legacy, data, and system modernization. The second—I think Stanley mentioned—we are expanding from 8% of revenue our sales effort to 12% along this year.

But for next year we plan to stabilize around 10%. I think this will be more than offset by the new gross margin we are already seeing in our engagements based on the new offerings and commercial models. And I think it's a sustainable long-term invest to keep accelerating our growth and increase our wallet and market share. So roughly we went from 8 to 12, and half is a transition of current SDLC engagements to AI agent model and new commercial models.

But part of this is a bigger, more strong global reach, new vertical geographies, and capabilities we are introducing in our sales. And so we will use our better gross margin and the dilution of our G&A as part of the puzzle of scaling CI&T Inc in a very profitable way. In the end, I think why we are very excited is we are building a company that really can scale revenue faster than headcount and also can grow more profitable as our new commercial models mature.

And it's clear now that it's going to happen. So we are very excited with this improvement in our typical pre-AI business model.

Gustavo Diaz, Analyst at UBS

Very clear.

Eduardo Galvan, Director of Investor Relations

Thank you. Thanks, Gustavo. Thanks, Gustavo. Our next question comes from Luke Morrison from Canaccord. Hey, Luke, please go ahead.

Luke Morrison, Analyst at Canaccord Genuity

Hey guys, good to see you. Nice job with the quarter. I’ve got a couple questions here. The first, I guess, on just consumption pricing and the new pricing model you guys are rolling out—the agent computing unit model. Just as I think about sort of the underlying cost of running these models keeps falling; token costs are falling. If you're billing on consumption and the unit cost drops every year under that pricing model, how do you stop that from becoming a deflationary force and a deflationary revenue line over time?

Cesar Gon, Founder and CEO

Look, it's not a simple question. All these curves are moving, right? The cost per token is drastically reducing, but as the capabilities of the model increase, we are using more tokens. But now we have the advent of different options regarding open-weights models, like we are now investing a lot in the Mistral partnership. So we have different alternatives, depending on the scenario. But in the end, our price-per-consumption model is important as an alternative for our clients, but we don't see this being the majority of our commercial model.

It will be relevant but always combined with other models. We are not banking everything on a SaaS ACU model. We just want to have a portfolio of models and then combine by engagement, by client, in the most proper way. But this is a long and complex game on adjusting pricing and cost structure around this. I think, luckily, it's just a small part of our bets.

Luke Morrison, Analyst at Canaccord Genuity

Yeah, fair enough, makes sense. And then maybe just dovetailing—you mentioned Mistral there. You've partnered with multiple frontier model providers on different terms at this stage. You know, obviously I think that Mistral alliance is attractive to different types of clients and different geos. But just how should I think about staying model-agnostic versus going deep with one? And to what extent do your clients care what's sitting underneath your platform and under Flow?

Bruno Guiccardi, President

When I—Bruno—want to try, I can take this one. They care, look, because there are sensitive terms on privacy and data controls, so they care. But Flow is an agnostic platform. Flow at this point is connected to more than 37 models and can kind of control that complexity for clients. But for us, we have to be agnostic and multimodal because we have clients in—we have more than, you know, 200 clients in different geographies and different sectors. The main providers there have different types of footprint. Right. So we have to work with our clients on what's best for them and kind of help them throughout that complexity in respecting their requirements for compliance and security. So that's the positioning that we are in, and kind of helping even with the FinOps that that implies—what are the models that are best for certain tasks. That's a knowledge that we built over the almost four years with Flow and kind of automating many different types of workstreams.

That's what we're helping our clients with, and I think that's what's driving a lot of those conversations and the deal flow that we're seeing.

Luke Morrison, Analyst at Canaccord Genuity

Thank you.

Eduardo Galvan, Director of Investor Relations

Thanks, Luke. Our next question comes from Cesar Medina from Morgan Stanley. Hi, Medina.

Cesar Medina, Analyst at Morgan Stanley

Hey, thanks for taking my questions and congrats on the results again. Boring question, but can you confirm what you mentioned—that 40% of your revenues in the first half are linked to this new pricing mechanism? And if that is correct, how much is this on the pipeline?

Cesar Gon, Founder and CEO

Yeah, yeah—40. Forty of the new sales. Medina, thank you for your question because we measure bookings and also revenue. Right. So I mentioned in our last call 40% now of everything we sold in the first half of the year are now based on new revenue. But we have a lot of long-term contracts that we are converting more incrementally to this new model. So I estimate that it will take around 18 months to have everything repriced in the new model, as we renew and we compound the new sales with the renewal of the current engagements.

So that's why we are saying the increase in our gross margin will be increased sequentially, incrementally, sequentially along the next quarters. Because we have the new sales pushing for the new margin level but also an effort on converting, let's say, legacy engagements into the new commercial models and margin potential to make sure you expect—within the next 18 months you will be 100% under the new revenue scheme, no less.

Bruno Guiccardi, President

But considering the new is a combination. There is some. That's part of what we do. That is time and material is very appropriate and even, even FDEs, now famous for deploying engineering, are time and material by design. So it's not 100% in a single model. We see a combination of five different, different even in a single engagement. Normally we have two or three components, but we will be living in this new territory in terms of contribution margin in a time frame of 18 months if we can under the current market conditions and if we continue to succeed on our journey of introducing those new models.

Cesar Medina, Analyst at Morgan Stanley

Okay, thank you so much and congrats again on the results.

Bruno Guiccardi, President

Thanks, Medina.

Eduardo Galvan, Director of Investor Relations

Thanks, Medina. That concludes our Q and A session. Thank you all for attending our event today. I'll now invite Cesar to proceed with his closing remarks.

Cesar Gon, Founder and CEO

Sure. Thanks, Bruno, Stanley, Eduardo. Thank you all for joining us again today. And again I need to thank all CI interns around the world. Thank you for your hard work and dedication and I'm glad that you are seeing our transformation happening. And of course a special thank you for our clients and to trust CI&T Inc as the AI deployment and innovation partner. So that's it. We see you soon. Stay well. Bye bye.

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