CI&T (CINT) Q3 2026 earnings review
CI&T earns more per project, but its sales costs climb
CI&T, a builder of software and AI systems for big companies, earns more per project but spends heavily on selling. Gross margin excluding one-offs rose to 37%, which chief executive Cesar Gon credited to new pricing and the firm's own AI tools. Sales grew 15%, helped by a stronger Brazilian real. The company's plan has growth slowing to about 10% in the fourth quarter.
| Sales growth at constant exchange rates | +11.2% +12.1% a year earlier |
|---|---|
| Gross margin, excluding one-offs | 36.6% 32.4% last quarter |
| Core profit margin (EBITDA), excluding one-offs | 15.5% 18.5% a year ago |
| Full-year sales outlook | Low end raised $2.5M middle of the range: 17% growth |
⚖️ Verdict: 🟢 Bullish
The story got better, because the margin gain is the first clear sign that CI&T can charge for the time its AI tools save. The firm also kept its full-year profit plan instead of cutting it again. One caution: by our math, that plan needs a fourth-quarter margin near 20% to reach its middle.
The question now is whether the gain reaches overall profit once the sales push winds down. If selling costs drop as planned, profit margins recover; if they stay at this level, the gain only pays for a larger sales team. Fourth-quarter selling costs, due in early 2027, will tell.
🐂 Bull Case
New Pricing Lifts Gross Margin to 36.6%
CI&T has long billed clients mostly by the hour. Chief executive Cesar Gon wants pay for results, and he said the new pricing and CI&T Flow, its in-house AI system for running projects, "allow revenue to grow faster than our team".
This quarter the figures backed Gon. Gross margin excluding one-offs rose 4.2 percentage points from the second quarter. Billable staff, which the group calls AI-Builders, held steady from a year ago, so each person brought in more revenue.
- Gross margin excluding one-offs: 36.6%, against 33.9% a year ago
- Gross margin under accounting rules: 34.7%, up 2.4 percentage points
- Revenue per AI-Builder over twelve months: $82.5 thousand, up 9.9%
The gain counts because costs moved the wrong way: a stronger Brazilian real and Brazil's returning payroll taxes raised staff costs, the release said. Pricing more than covered them. But CI&T does not say how much of its revenue now runs on the new models.
What to watch: gross margin excluding one-offs in the fourth quarter, due in early 2027. A second quarter near this level would show the new pricing has spread across enough contracts to last.
Banks and Smaller Clients Lead Broad Growth
CI&T relies a little less on its ten biggest clients than a year ago. Sales to everyone else rose 17.1%, against 12.2% for the top ten, and chief executive Cesar Gon called growth "broad-based".
- Financial services, the largest industry group: up 26.1%
- Technology and telecommunications: up 40.2%
- Life sciences: up 23.4%
- Consumer goods: down 11.1%
The spread helps because no single industry carries the group. But both leaders slowed from the second quarter, when financial services grew 36% and technology 68%. Consumer goods shrank faster in each quarter of this year.
What to watch: growth outside the top ten clients in the fourth quarter. A lead that holds would show the new sales staff are adding clients, as Gon said.
Positives this quarter didn't test
Three positives from earlier quarters got no new figures this time. Neither the release nor the presentation gives them, and the materials for this quarter do not include the conference call.
- Partnerships with AI model makers such as Anthropic and Mistral: no update; a named client project would show they bring in work
- Sales pipeline, the deals under negotiation: last given as 40% larger than a year earlier; a fresh figure would show whether the new sales staff convert it
- Share of new contracts on results-based pricing: last given as about 30% in the first half; a higher share would support the gross margin gain
🐻 Bear Case
Sales Spending Keeps Profit Margin Below Last Year
CI&T spent this year enlarging its sales force. Part was a temporary push, the Agentic SDLC initiative, to sell AI-driven software development; part was a "structural expansion of our commercial organization". Chief executive Cesar Gon said the spending is "expanding our pipeline".
This quarter carried the full cost. Selling expenses reached 14.0% of revenue, against 7.9% a year ago. Office and administrative costs dropped to 10.2% of revenue, which covered only a small part. So EBITDA margin excluding one-offs, a measure of operating profit before depreciation and similar charges, slipped to 15.5% from 18.5%.
The release said the sales push ended in the third quarter, and CI&T expects selling costs to shrink as a share of revenue. The full-year margin plan stayed in place, but by our math even its bottom needs a stronger fourth quarter than the third. The risk is that sales costs, a stronger real and clients paying less for AI-assisted work keep the margin down.
What to watch: selling expenses as a share of revenue in the fourth quarter, due in early 2027. A ratio still near this level would mean the bigger sales force is a lasting cost that absorbs the gross margin gain.
Sales Beat the Plan by a Narrower Margin
CI&T called this its "eighth consecutive quarter of double-digit organic growth", using that word for dollar growth from businesses it already owned. At constant exchange rates, which strip out currency moves, growth was 11.2%, the slowest in two years.
Revenue came in just 0.4% above the floor of the outlook. In the three quarters before, the firm beat it by 1.4% to 2.1%. So the usual cushion nearly vanished. The release also corrected last quarter's target at constant rates to 9.9%, "not 12.3% as previously stated".
Measured against the target first given, growth fell short. The fourth-quarter outlook has growth at constant rates below 10%, which would end the double-digit run. About 5 percentage points of this year's planned growth comes from the stronger real, the release said.
What to watch: fourth-quarter growth at constant exchange rates, due in early 2027. A figure under 10% would show demand slowing, not only currency gains fading.
Cash Improved, but Unbilled Work Still Grows
In the first half, CI&T booked revenue faster than clients paid. Contract assets, work done but not yet billed, nearly doubled, and operating cash flow was close to zero in the second quarter.
The third quarter reversed much of that. Cash from operations before tax and interest reached $22.4 million, close to core operating profit. Free cash flow, the cash left after investment, came to $14.8 million, from $5.3 million a year ago.
But contract assets still rose to $66.5 million by September, from $62.1 million in June. Money the group expects back from tax authorities also climbed. One strong quarter fades this concern without settling it.
What to watch: contract assets in the annual results, due in early 2027. A falling balance would show clients paying for work CI&T has already done.
North America Still Trails Latin America
North America, CI&T's sales to US clients, barely moved in the first half of the year. This quarter it grew 3.9% from the second quarter, the fastest of the group's regions, the release said.
From a year ago, though, North America rose 8.7%, while Latin America, mostly Brazil, gained 20.0%. Latin America now brings in half of all sales. The largest single client grew 19.0% and makes up 12.1% of revenue, by our math. So growth leans on Brazil and on one big client.
What to watch: North America's growth from the previous quarter, in the fourth-quarter results. A second gain in a row would show the US business has started moving again.
👓 Other Themes
Brazil's Stronger Real Lifts Sales and Costs
Half of CI&T's sales come from Latin America, so the Brazilian real moves both its sales and its costs. The currency added 3.7 percentage points to growth this quarter, the release said. It also raised staff costs, together with the "resumption of payroll taxes" in Brazil. The fourth-quarter outlook assumes 5.38 reals per dollar, weaker than the 5.14 average this quarter.
CI&T Pitches AI That Recommends Business Decisions
CI&T's presentation showed Decision Intelligence, a service that goes beyond reports on what already happened. The slides say it turns company data "into decisions, made at the right time". Clients start at a stage where "AI recommends, a person approves" and can move to systems that run on their own. The group gave no revenue or client figures for it.
💲 Other KPIs
Debt minus cash fell to $78.3 million at the end of September by our math, as operating cash recovered. That equals about 0.9 times the last twelve months of core operating profit (EBITDA, excluding one-offs), against 1.2 times a year earlier. Lenders cap the ratio at 3.0 times, measured at year-end.
The IT services group kept shrinking its share count, with 2.4% fewer diluted shares than a year ago. It spent $2.9 million on buybacks this quarter, far below the 2025 pace. Its authorization to repurchase up to 5 million shares runs to the end of 2026.
Taxes took a smaller bite: the effective rate dropped to 29% from 34% a year ago. The software firm used research and development tax incentives, the release said, which softened the profit decline. Such credits vary from quarter to quarter, so the rate says little about next year.
🔮 Guidance
Raised. The plan now has CI&T's sales growing 16% to 18% this year. The firm lifted only the bottom of the range, so the middle rose by just $1.25 million. Third raise this year; each is smaller than the last: +$7.4M, +$6.1M, +$1.3M. After nine months, the year looks within reach, because the fourth quarter only needs sales near the third's.
New. The plan has fourth-quarter sales about 9.6% above a year ago at the middle of the range, or 9.3% at constant exchange rates. That would be the slowest pace in the eight quarters the company has shown. If the usual beat holds, the quarter would land near 11.6% growth, by our math.
Unchanged. The plan still calls for a core profit margin (EBITDA, excluding one-offs) of 15% to 17%, after a cut three months ago. The first nine months ran at 14.7%. By our math, the bottom of the range needs a fourth-quarter margin near 16%. The middle needs about 20%, above the 18.4% of a year earlier.
❓ Key Questions
What share of revenue now runs on results-based pricing?
CI&T reports the share of new contracts on its new pricing models, not the share of revenue. The revenue share decides how far the gross margin gain can go.
Why did unbilled work keep growing after June?
Contract assets rose again while cash improved. Readers need to know whether the new pricing delays billing or clients are paying more slowly.
How much sales spending ends with the Agentic SDLC push?
The release said the temporary sales push for AI-driven software development ended this quarter. The split between that cost and the permanent sales expansion sets how far selling costs drop next year.
Why does the plan show growth below 10% next quarter?
Chief executive Cesar Gon said this year's investment is expanding the pipeline, yet the outlook has growth at constant exchange rates at its slowest in two years. The company has not explained the gap.
How did the constant-currency target come to be misstated?
CI&T corrected last quarter's growth target at constant rates and the currency boost in its annual plan. Investors should know what checks now prevent a repeat.