Good afternoon, everyone, and welcome to GFT Technologies conference call on the results of the first nine months of 2026. I am Andreas Herzog, Head of Investor Relations and your host today. Thank you for joining us. Joining me on the call are Marco Santos, Global CEO, and Jochen Ruetz, CFO and Deputy CEO. Before we begin, please note that today's call is being recorded. The presentation accompanying today's discussion and other materials relating to our nine-month results have been available in the investor relations sections of our website since this morning. A replay of this conference call will also be made available after today's event. Marco will begin with an overview of the key developments and highlights during the first nine months of the year. Jochen will then discuss the financial performance before Marco takes over again to cover the outlook and conclude the presentation.
We will then open the call for your questions, of course. To ask a question, please open the question tab on the right-hand side of your webcast screen and click "Request to Speak" under "Ask on Air." Your requests will be added to the queue, and I will invite you to speak when it is your turn. Please note that only your voice will go on air. Your camera will remain off. With that, let me hand over to Marco. Please go ahead, Marco.
Thank you, Andreas. Good afternoon, everyone, and thank you for joining us today. Let me start with the highlights for the first nine months of 2026 and our improved full-year guidance. We delivered solid revenue growth, significantly improved profitability, and raised our full-year revenue guidance. These results demonstrate disciplined execution on our AI-centric five-year strategy and continued progress in sharpening our focus on profitable growth. In the first nine months of 2026, GFT generated EUR 701 million in revenue, representing 7% of growth in euros and 5% growth in constant currencies. Profitability improved significantly. Adjusted EBIT reached EUR 53 million, corresponding to a margin of 7.6%, compared with 7% in the first nine months of 2025. EBIT reached EUR 40 million, with the EBIT margin improving from 4.9%- 5.7%.
This reflects stronger operational efficiency and tighter cost management, alongside the increasing contribution of AI-native engineering services and our Wynxx Agentic AI platform. We are growing revenue while expanding margins as we continue to transform GFT into an AI-native company. Based on this performance, we are increasing our full-year 2026 revenue guidance from EUR 930 million- EUR 945 million, corresponding to 6% reported growth and 5% growth in constant currencies. Some of our main growth markets continue to perform strongly. Revenue grew by 36% in Brazil, 38% in Colombia, and 14% in Spain. We recorded growth across all sectors, with banking growing 6%, insurance 7%, and industry 13%. We are also increasing adjusted EBIT guidance from EUR 71 million- EUR 72 million, maintaining a margin of 7.6%. Our EBIT guidance remains approximately EUR 56 million, corresponding to a margin of approximately 6%.
These results demonstrate solid progress across our financial objectives, with strong revenue growth, improved profitability, and a raised full-year outlook. Let me now turn to the execution of our AI-centric five-year strategy and the progress we are making with key clients and offerings. First, I am very proud to say that Deutsche Bank selected GFT as the main transformation and system integration partner for the modernization of its core banking platform in Germany, implementing Thought Machine's Vault Core platform. Building on more than 25 years of collaboration with Deutsche Bank, we are taking our partnership to the next level. This major strategic engagement combines our deep banking expertise, cloud-native engineering, and AI-native accelerators in a mission-critical core banking transformation. Second, Itaú Unibanco, the largest private sector bank in Brazil, Latin America, serving approximately 70 million customers. Itaú selected GFT to accelerate the bank's AI-native modernization program.
We developed and deployed the Batch2Cloud assets integrated into our Wynxx Agentic AI platform, achieving up to 70% shorter migration times and up to 3.3x faster project delivery cycles. This is an important proof point for our AI modernization offering, demonstrating its potential to deliver measurable productivity gains in complex banking transformations. Third, we secured one of our first major Forward Deployed Engineering, FDE engagements with a U.K. tier one real estate and mortgage brokerage, combining GFT FDE pods, agentic AI, and our AI experience lab. In this new delivery model, autonomous multidisciplinary teams combining business and AI engineering expertise work directly alongside client teams to understand business challenge and redesign processes. Leveraging our AIX methodology, they identify opportunities, design the AI architecture, and support the development and deployment of tailored AI solutions.
For GFT, this represents an important step in establishing our new forward deploy engineering model, bringing AI-centric business transformation closer to our clients. Fourth, we successfully extended our AI data and software engineering service at a leading German cognitive robotics company. This further expands our footprint in the emerging physical AI and robotics markets, where software, data, and real-world operations come together. It also demonstrates our ability to grow strategic client relationships and apply our engineering and AI expertise beyond financial service in high-growth industrial sectors. Finally, a leading German bank deployed our AI-native intelligent customer segmentation solution within our Smaragd anti-financial crime and anti-money laundering platform. The solution automatically clusters customers based on transaction patterns to improve analytical accuracy and compliance operations. By expanding our Smaragd platform with AI capabilities, we are creating additional value for existing clients and strengthening our long-term relationships.
Across these engagements, we are expanding strategic client relationships, scaling differentiated offerings, and delivering measurable client impact in line with our AI-centric five-year strategy. Beyond our clients' engagements, our next-generation technology brand and positioning continue to generate important recognition in the market. Intel recognized GFT with the Cloud Excellence Award, Partner of the Year for Latin America at the Intel Partner Summit 2026. The award recognizes our work in the Intel Acceleration Program, a joint Intel and Amazon Web Services, AWS, initiative to modernize cloud infrastructure. Together with our partners, we modernized workloads for a leading financial service company, generating approximately $1 million in annual cost savings across a target group of applications. This also demonstrates how our cloud modernization and optimization capabilities deliver tangible financial value for clients.
GFT has also been named a leader in the QKS Group SPARK Matrix for digital banking services for the fifth consecutive year. This recognition validates the strength and consistency of our digital banking capabilities, combining deep financial service expertise, cloud-native core banking, AI-native engineering, and delivery excellence. Those achievements further reinforce GFT's global brand and technology positioning, strengthening our credibility with clients and our ability to compete for larger and more strategic transformation programs. Let me now focus on the tangible results of our AI-centric strategy and the continued expansion of our Wynxx platform and our strategic AI ecosystem of partners. I am very pleased to report that Wynxx, our agentic AI platform, continues to expand across software engineering and business processes, delivering increasing commercial impact.
Wynxx Software Engineering reached EUR 38.1 million of influenced revenue in the first nine months of 2026, compared with EUR 24.4 million in the first half of the year. Wynxx Business Process generated EUR 24.3 million of influenced revenue, compared with EUR 14.8 million in the first half. Both combined take Wynxx to EUR 62.4 million of influenced revenue in the first nine months of 2026. These results demonstrate the growing contribution of Wynxx to our AI-centric strategy as we expand its application beyond software engineering into business processes. I will return to the platform and these results in more detail on the next slide. In parallel, we are developing and launching the Wynxx AI FinOps engine to provision, monitor, and control AI token utilization for GFT employees and for our clients.
As banks, insurers, and other large organizations scale their use of different AI models and agents, managing token consumption and cost become critical to maintaining control over AI spending and ensuring economic efficiency at scale. This capability will provide greater visibility and control over AI usage and costs, supporting the responsible and cost-efficient scaling of AI. Another important milestone is the signing of partnership agreements with Anthropic and OpenAI, further strengthening our strategic artificial intelligence ecosystem. These partnerships reinforce our multi-model approach, allowing us to leverage leading AI technologies alongside our Wynxx platform and AI-native delivery capabilities, selecting the most appropriate models and tools for each client environment. Furthermore, Google Cloud selected GFT as a launch partner for Gemini Enterprise for Financial Services.
This extends our long-standing collaboration with Google Cloud and supports the automation of complex processes in financial institutions, strengthening our position as a technology partner for highly regulated industries. These developments demonstrate our progress in scaling Wynxx, strengthening our strategic AI ecosystem of partners, and translating innovation and intellectual property into tangible commercial results. Let me now turn to the continued evolution of our Wynxx Agentic AI platform and its growing revenue impact. As I outlined in previous calls, Wynxx is built on a common enterprise foundation, providing orchestration, governance, and access to market-leading proprietary and open-weight AI models and tools. An important development is the expansion of our deployment capabilities to support on-premises and private cloud environments, including sovereign and private large language models. This gives clients greater flexibility and control over their AI infrastructure, particularly in highly regulated industries where data sovereignty, security, and privacy are critical.
On top of this foundation, Wynxx addresses two main areas of AI client transformation. The first is Wynxx Software Engineering, covering the software development life cycle, AI modernization, and application management service. The second is Wynxx Business Process, applying agentic AI to automate and redesign operational and industry-specific workflows. We are working on a third pillar, Wynxx Data Intelligence, which we are planning to announce in 2027. These capabilities are extended through our Wynxx innovation ecosystem and marketplace, enabling GFT and our clients to build, govern, and reuse assets and accelerators at scale. As shown earlier, in the first nine months of 2026, Wynxx Software Engineering reached EUR 38.1 million, and Wynxx Business Process reached EUR 24.3 million of influenced revenue, and both areas combined generated EUR 62.4 million of influenced revenue.
These figures demonstrate how we are translating our AI-centric five-year strategy into tangible commercial results, leveraging our intellectual property, innovation, and AI-native engineering capabilities to drive productivity and create new revenue opportunities for GFT. With that, I will now hand over to Jochen for a detailed review of the financials.
Thank you, Marco, and let's directly move to slide number 10. Let me start with the headline. The sustained growth momentum with significant profitability improvement is what clearly describes the first nine months of 2026. The revenue came in at nearly EUR 701 million. This is 7% more than a year ago, 5% growth in constant currencies. As the headline says, the momentum is growing. The Q3 revenue grew by 11%. The order backlog increased by 22%, 21% in constant currencies, and most of this order backlog is related to future years, 2027 and later. Adjusted EBIT has significantly increased by 16% to nearly EUR 53 million, and it is reflecting improved personnel efficiencies. We are reflecting lower office lease expenses and a positive impact from favorable FX.
What is true for revenue is true for profits as well, but on a far smaller scale, roughly EUR 600,000-EUR 700,000. Adjusted EBIT margin stands at 7.6% after nine months. This compares to 9% a year ago. Looking at the EBIT, we are up 24% to exactly EUR 40 million, and the additional impacts that we had on the EBIT is lower capacity adjustments, EUR 5.2 million this first nine months versus EUR 8.1 million a year ago. Improved financial results of EUR 2 million negative versus EUR 2.7 million. We had less overall debt throughout the first nine months, but the interest rate, especially after the Iran war started, were picking up a bit, so two contrary effects there.
Minor headwinds from virtual shares. Our share price increased, which is nice, but at the same time, our virtual share program became a bit more expensive. This burdened the EBIT with EUR 900,000.
Overall, EBIT margin after nine months stands at 5.7%. The last bullet point on the right, the tax rate after nine months stands at 29%, improving the earnings per share a bit. Let's move forward to slide number 11 and start with the left side of the slide, the growth in our sectors. We see all three sectors are showing growth. Start with industry and others, picking up by 13%, as Marco had already mentioned, strongest growth in our portfolio. Insurance grew by 7% in the first nine months, and our banking business by 6%. All sectors are contributing. On the right side, our client portfolio shows that in the first nine months of 2026, growth was strongest with clients in the size category below EUR 25 million.
There, it was either stable or increasing share, while the biggest clients grew a bit more slowly, and the share reduced to 26%. Our largest client stood for 10% of our revenue in the first nine months of 2026. Moving again forward to slide number 12 and looking at the quarter itself, Q3 2026 versus previous year's Q3 shows growth of 11%, and this is mainly driven by Brazil, Spain, and Colombia. When we compare quarter-over-quarter revenue, Q3 versus Q2, we see an increase of 2%. This speed will probably continue into Q4, 2%-3% growth versus the third quarter of this year. On the right side, we see the adjusted EBIT, which is 32% higher year-over-year, improvement coming from improved personnel efficiencies and disciplined cost management. The margin stood at 8.5% in the third quarter.
When we compare quarter-over-quarter, we see also a strong improvement. As usual, our second half is more profitable than our first half. This is the seasonality that GFT always shows, and we see quarter-over-quarter increase of 23%, which again is driven by personnel efficiencies and disciplined cost management. Just referring to last year, there we saw adjusted EBIT in Q3 and Q4 move a lot, very different numbers. Usually, our quarterly margins in the second half are more balanced, but 2025, with our restructurings, was a special year. For 2026, the second half, we expect those margins again to be more balanced, with Q4 mostly following Q3. Moving on, slide number 13, looking at the segment reporting and starting with the revenue. On the top, we see the evolution of our European markets.
We are down 1%, while Spain is maintaining its growth, and Switzerland is also contributing growth on a smaller scale. We see Germany showing improvement, but still double digit below previous year. In U.K., we returned to growth in Q3, reflecting the improved trajectory as planned. The growth in Q3 of the legal entity in U.K. was double digit, more than 10% versus Q3 of last year. Looking at Americas and APAC, here we see the strongest momentum, 15% growth after nine months, driven by our Brazilian and Colombian markets. We see a more stable development in the U.S. and a software performance in Canada. Now we move to slide 14. We look at the same segments, this time profitability. Let's start on the left. Adjusted EBIT grew in Europe by 41% year-over-year. This is based on the improvements mainly coming from U.K. and software solutions.
We are returning to more normal margins. On the Americas and APAC, we see a 20% improvement on the EBIT adjusted, which is mostly driven by the growth coming from Brazil and Colombia. When we go to the right side, the EBT, similar evolution. We see Europe up 126%. Well, last year we had a lot of restructuring, mostly in the U.K. Therefore, we are returning to more normal margins, and the EBT evolution in Americas and APAC is weaker than on the operational side, which is mostly driven by our Megawork Consultoria e Sistemas Ltda acquisition, which includes more amortization effects and earn-out. These two components are the main reason why we are growing EBT slower than EBIT adjusted. Let's move forward to slide 15, which shows our global regions by customer location. As usual, I start at the bottom in our smallest region, APAC and others.
Here we show growth of 1% versus previous year nine months. Let me highlight, we see a very strong Q4 for this region. While we are at 1% today, on full year level, we believe we will be double-digit growth in APAC and others. We are looking into a very solid fourth quarter for that region, which is good news then for that region in 2027. U.K. performing as expected with down 9%. The last time we did this call three months ago, the U.K. number was minus 18. Obviously, U.K. is now coming back. The reduction is reducing. We are growing in Q3, back to growth in the U.K. North America, we are down 6% in EUR. When we look at local currency, we see that the U.S. is up 3% in USD, and Canada is a bit lower, 8% in CAD. Latin America up 29%.
This is mostly coming from Brazil and Colombia, and it is supported by FX. These currencies have shown a lot of strength versus the EUR. Nevertheless, both of these countries, Brazil and Colombia, both grow in local currency organically more than 20% this year. Continental Europe up 1%. Three months ago, it was a zero, so a notch better. We see strong growth in Spain. Germany is below 25%, but with an improving trend. Moving forward, slide number 16, the income statement. Let's be brief on this one. We have bullet points on the right. The second says that purchase service cost ratio was stable at 12.5%. We see personnel expenses grow by 6%, which is, as usual, reflecting salary inflation and our often-mentioned higher social security contributions, particularly in Brazil.
If we combine purchase services and personnel, we see the overall ratio, and we see it at 84.3, a slight improvement versus last year of 0.3 percentage points. Number four, other operating expenses is up 6%. By IFRS standards, we have to book the Megawork Consultoria e Sistemas Ltda earn-out here, which is a bit exceptional. If you take that out, the real operating expenses have grown by 3%, so in line with revenue, which means, from a CFO perspective, more slowly. Last but not least, tax rate. Tax rate is at 28.9%, has improved versus previous year, nine months. Let's move to slide number 17, the cash flow statement. Among all the solid and strong performance KPIs after nine months, I think our operating cash flow stands out as a highlight.
We started the year with -EUR 55 million in net cash, and now, after nine months, we are showing an operating cash flow of EUR 30 million. 12 months ago, this was EUR 2 million, so a strong improvement, reflecting higher net income and an improved working capital. It is reflecting also a focused improvement process in our European countries on accounts receivable, so managing the working capital. Last but not least, there are some effects of subsidies coming earlier this year than last year, and tax payments coming probably in Q4, not in Q3, so there will be a bit of rebalancing, but a very strong operating cash flow after nine months. As always, limited investing activities, EUR 3.7 million. Cash flow from financing mostly used for dividends and loan paybacks.
This leads, and this is the last bullet point on the right, to a free cash flow adjusted of + EUR 19 million. Last year, at the same moment in time, it was -EUR 10 million. That is the highlight for me for the nine-month numbers. Moving to slide number 18, balance sheet. Not much to talk about. Let me only mention that the equity ratio after nine months stands at 46.2%, which shows a solid balance sheet structure. Slide number 19, our people slide. We see on the left the employee number, the FTE number is up 1% versus the beginning of the year. We had growth in people in Brazil, Colombia, and Spain, but we also had reductions in Mexico, Canada, and Costa Rica. Overall, the team size did not move a lot.
We are also using less contractors at the end of September of this year versus a year ago, 1,364. Looking at the middle, utilization was good in this third quarter, slightly up versus Q2 of this year and up versus previous year's utilization. On the right side, attrition. Attrition is at an all-time low, 9.9%, heavily reduced versus a year ago. We see this reflect the not-so-dynamic working market, which means usually the IT service market overall is not as dynamic as in previous years, and that is why people do not move jobs that much. I would appreciate a bit more attrition. It would reflect a stronger market overall. Slide number 20, additional full-year 2026 milestones. Here we have upgraded the first KPI, the free cash flow adjusted for the year. We so far guided for EUR 40 million.
We are now upping this to EUR 45 million of free cash flow adjusted. The other KPIs are unchanged. Net debt versus EBITDA should be at 0.2x, and utilization at 92%, probably a bit defensive, bigger than 92%. With that, back to you, Marco.
Thank you, Jochen. Before turning to the conclusion, let me now address our midterm ambitions for 2029. When we first published our AI-centric five-year strategy in March 2025, we outlined ambitions of approximately EUR 1.5 billion in revenue, a 9.5% adjusted EBIT margin, approximately 50% high value-added service, and a smartshore versus onshore ratio of approximately 40%. Today, we are sharpening our focus on profitable growth. We have achieved solid revenue growth momentum in 2026, and we see this momentum continued into 2027 and beyond. At the same time, artificial intelligence is reshaping the economics of IT services by increasing delivery productivity and changing the relationship between headcount, billable effort, revenue, and outcome. Against this backdrop, we are sharpening our M&A strategy, prioritizing specialized acquisitions with a strong AI-driven strategic fit over volume and scale-driven M&As.
Our focus is on strengthening our capabilities and profitability rather than adding revenue volume into our business model. As a result, we are realigning from an absolute revenue target to a qualitative one, maintaining our growth momentum while increasing our focus on profitability, supported by our AI-native engineering capabilities, differentiated offerings, assets, Wynxx AI Agentic Platform, and strategic client relations. Furthermore, we are reinforcing our ambition of approximately 9.5% adjusted EBIT margin and approximately 50% high value-added services by 2029. We will continue shifting our portfolio towards an AI-native engineering and higher value services while optimizing our operating model and capturing economies of scale. Regarding our smartshore versus onshore ambition, we are refining the target from 40% to approximately 30%. AI-driven client transformation increasingly requires closer on-site collaboration based on Forward Deployed Engineers.
Our delivery mix is evolving to reflect these demands while preserving the benefits of our global operating model. Our AI-centric strategy remains unchanged, more relevant today than ever before, and crystal clear to our employees, partners, and clients. We are aligning our ambitions with the economics of the AI-native era, reinforcing our profitability improvement objectives, leveraging our solid growth momentum, and focusing on profitable growth to 2029 and beyond. Let me now briefly turn to our share price performance and shareholder structure. GFT's share price has increased by approximately 45% in 2026, reaching EUR 27.45 as of the November 10th. This represents a strong performance, outperforming the SDAX over the period. We are also seeing positive sentiment among analysts, with all seven covering analysts recommending GFT shares as a buy. The average target price is approximately EUR 31, indicating further upside potential of more than 10%.
Our shareholder structure remains stable, with a free float of approximately 61% and continued significant ownership by our long-term shareholders. Alongside our share price performance, we remain committed to an attractive dividend policy, with a dividend of EUR 0.50 per share for 2026, consistent with the previous two years. Overall, our share price development and analyst coverage are encouraging. We remain focused on executing our AI-centric five-year strategy, delivering on our commitments, and driving profitable growth. Let me summarize the key message from today. We delivered solid growth in the first nine months of 2026, with EUR 701 million in revenue, representing 7% growth in euros and 5% growth in constant currencies, and significantly improved profitability.
Based on this performance, we increased our full-year revenue guidance from EUR 930 million- EUR 945 million and adjusted EBIT guidance from EUR 71 million- EUR 72 million, maintaining an adjusted EBIT margin of approximately 7.6%. Momentum remains strong in some of our key growth markets, supported by larger strategic engagements and expansion with existing clients. We also achieved growth across all sectors. Our AI modernization offering is delivering results at enterprise scale and is publicly recognized by our clients. Deutsche Bank selected GFT for its private bank core banking modernization in Germany, while our collaboration with Itaú Unibanco achieved up to 70% shorter migration times and 3.3x faster project delivery with the Batch2Cloud by Wynxx. These engagements demonstrate the strength of our AI-native engineering capabilities and deep industry expertise in complex banking transformation programs.
Our Wynxx Agentic AI Platform has become a measurable revenue contributor to our AI-centric strategy, reaching EUR 38.1 million in influenced revenues for Wynxx Software Engineering and EUR 24.3 million for Wynxx Business Process, while continuing to scale across clients, geographies, and IT and business use cases. Our partnerships with Anthropic and OpenAI, alongside our continued collaboration with Google Cloud, further strengthen our strategic AI ecosystem and support the expansion of our AI-native offerings. To conclude, we are executing our AI-centric five-year strategy with increasing commercial proof, combining AI-native engineering, industry expertise, assets, and intellectual property, while sharpening our focus on profitable growth. We anticipated the profound impact of artificial intelligence early, invested in our own technology and transformed our delivery capabilities. Today, as AI fundamentally reshapes our industry, we are translating our strategy into tangible commercial results with a clear focus on profitable growth. Thank you very much.
Now, Jochen and I will be happy to answer your questions.
Thank you, Marco, and thank you, Jochen. As Marco already said, we are now happy to take your questions. To join the Q&A, please open the Questions tab on the right-hand side of the webcast screen and click Request to Speak under Ask on Air. Your request will be added to the queue, and I will invite you to speak when it's your turn. When I call your name, please unmute your microphone and ask your question. Please note that only your voice will go on air. Your camera will remain off. We already have some questions in the queue, and the first question will come from Andreas Wolf from Berenberg. Andreas, please go ahead.
Hi. Hello, everyone. I hope you can hear me well. I have a couple of questions. The first one is on the higher interest rate environment. I remember the last time interest rates increased, it had a negative impact on demand from banks, because they felt less pressure from startups. Could you comment on the current demand environment? You've already alluded to a decline in attrition, which is already a hint towards what's going on in the market. The second question is on the backlog. When will the backlog translate into revenues? You might have answered this question before, but maybe you could provide a refresher here. The third question is on the forward engineers. Do you see a changed competitive landscape with forward engineers deploying AI solutions?
Do you see new market entrants, or is it basically the same players that we know from other business areas of GFT? My last question is related to the smartshore. You are targeting 30% by 2029 or in 2029. What is the current level? Thank you.
Let me pick up your first question, high interest rate environment. Yeah, we have learned in the past that there are sometimes contradicting developments in the market. Higher interest rate usually is good for a large part of our clients, especially banks, because on the interest margins, it is beneficial. At the same time, we saw interest rates, the last time it picked up, 2023, 2024, hurt especially young fintech startups, and then the banks felt less of competitive pressure. We believe that was a one-off, right? This time, well, it should be good for the P&L of the banks if interest rates continue up, which honestly, we do not really know if this will be meaningful over a longer period. So it should be beneficial for a big part of GFT's clients, while the downside on the fintechs, I think, is behind us somewhat.
Therefore, should be more positive if the clients spend the additional profits. I will take the second one as well, order backlog. Well, as always, the majority of the order backlog, [inaudible] , reflects Q4, and then the biggest part again is 2027. However, we do have a number of contracts which go into 2028 and later, especially with our new SAP business. We see order backlog for multiple years, which is then very related to Megawork and our Brazilian market. But the majority is Q4 and 2027.
Let me take the third question regarding FDE, Forward Deployed Engineers. With GFT, we started early on. This is part of our AI-centric strategy, and we have created a strong program to upskill, reskill our team, and also shift our team towards an AI-native engineering team. This translates ultimately to Forward Deployed Engineers, FDEs, that you need to bring specialized engineers on the ground to our clients in order to help them to implement a new agentic software development lifecycle, agentic AI modernization, and creation of new applications, spec-driven, and help the clients to transform their programs and their services towards an AI-native, AI-centric approach. FDE is key for that. On the other side, also implementing agentic AI for business process. Those two trends are trends supported by Forward Deployed Engineers, more consultants on site, more engineers on site.
We see that we are very skilled on that. That's our differentiation from GFT. We started early on, and we want to leverage over it. I think you also asked on that question, if you see that the current competitors, the current players, they are going to also play that, right? They are going to take that opportunity. It's all about the differentiation on AI native, right? I think the other competitors, they can also play on that. But I think at GFT, we are well-positioned. We started early on, and we can drive that forward. I am already talking with some of our partners, one of the partners that I mentioned today, in order that GFT can help them augment their professional service, their FDEs, to their clients. That's discussions that we are having with some of those large AI companies.
Again, GFT is very well-positioned for that. The fourth question, smartshore. Our KPI today, smartshore, is approximately 20% today. Our target is 30%. We believe that on that journey, on way forward, we are going to improve smartshore, also translating and changing some of our services to FTE, and then have still growth for smartshore. But not that growth that we were expecting for.
Last but not least, welcome back, Andreas.
Thank you. I am looking forward to the next quarters.
Excellent. Thank you. Have your questions been answered, I guess? The next question will come from Oliver Frey, Bankhaus Metzler. Please unmute yourself and go ahead.
Hi. Thank you for taking my question. Maybe one on the effects that we could expect on the cost side for next year. I am thinking about hiring, social security, you mentioned already in your presentation, and how that could translate into margins. Like a quick look for the next year.
Well, on the social security, a quick one from the non-Brazilian in the room. The trend is continuing. This is a four-year initiative by the Brazilian government. All service companies in Brazil will face higher social security contributions in 2027 again. This will probably challenge us with another EUR 7 million for the next year, which this year we have been able to compensate quite well. Beyond that, we are not foreseeing anything special at the moment. On the hiring side, you saw we grew by 1% people, so that is not the major challenge. Attrition is low. Salary inflation, I think the update should be given in March, when we anyway do the guidance.
Thank you.
Thank you very much for your question. We have another question coming in from Simon Keller, NuWays. Please unmute yourself and go ahead.
Hey, everyone. Congrats on the strong results, and thanks for taking my questions. I have three. Firstly, what explains your conservative Q4 stance? I see that adjusted EBIT implied for Q4 is down 13% year-over-year, and this obviously stands in stark contrast with the 30% growth that we've seen in Q3. Secondly, what's your read on the market right now? Because I'm seeing that peers are also upgrading their outlook in line with your outlook raise. Overall, everyone stays rather conservative. Also, your attrition numbers are, I'd say, rather conservative indication.
At the end of the day, this is a positive development, I'd say, and I was wondering whether we might stay or be at the beginning of a cycle that has turned in your favor, and whether you are confident that we don't see 20% growth or something that we've seen in 2022 or the like in the next year. Although maybe that's not the base case, but is there the potential for you, in your view, or is that out of sight, basically? Thirdly, that's my third question now, in this regard, looking at the order backlog, which has also developed really strongly, I'm trying to get a sense of how broad this development is.
I was wondering whether you could maybe provide us with an insight, excluding large contracts, whether it has also grown by roughly 20%, or whether this is purely basically one contract that has lifted it overall. Thank you.
Let me start with conservative Q4. Well, I think, as always, Q4 is pretty obvious lying in front of us. I said it will be 2%-3% growth versus Q3. On the EBIT adjusted side, maybe your math is right, maybe our guidance is right. I think in between there is not a lot, right? Let's see where we end up. It could be that we're a bit closer to the Q3 margin than you're currently calculating, and you're right. On the order backlog, let me answer that one. It is mixed projects all over the place. It's not one big project, right? In SAP, it's a couple of projects with clients in South America, and then it's simply a more long-term client relationship that we have seen in some of our markets, which is now reflecting 2027, 2028.
Of course, as you see in the number of order backlog, it's not enough for 2027, right? We need to win a bit more and some extensions. Therefore, it's a good sign for 2027. I like what you talk about the next cycle, right? Of course, we would love that, but honestly, neither us nor the peers see it right in front of us at the moment. Nobody's guiding for double-digit growth today. We would be a bit more cautious. The order backlog is a good starting point for the year 2027 for us.
Read on the market, Marco.
You cannot rule it out, though, or is there some sentiment also in the discussions with your customers that they hint you at point or point at being rather conservative?
Simon, let me take this one. We see a very good momentum, right? I see a good momentum. I feel we are closing, to be very candid with you, we are closing the year, right, we are approaching to close the year in a very nice way. We are growing, and we see a very good momentum as well for 2027. There are very good discussions with some key clients. Some of them I mentioned today. Very good discussions with our partners as well, the strategic partners, AWS, Google, Anthropic, OpenAI. Very strategic, good strategic discussions, C-level of those clients, of those partners, okay? I must say that, yeah, I think that we are not conservative. We are responsible, right? I do not want to simply come to the market and simply start shouting about double-digit and accelerated growth around the corner.
I sense a good momentum, as I mentioned, and I believe that we are in a sweet spot, GFT. We are in a sweet spot on the market with differentiations, with a platform, with assets, with IP, with a strategy. I believe on growth, and I am focused on creating that profitable growth and create the infrastructure to be successful into an AI world. We are creating the infrastructure in terms of organization, culture, mindset, technology, platform, partnerships, in order to be the leader, the global leader on that world. I believe that in future, I believe in an accelerated growth in future, but I am not going to promise that. Need to be responsible. To close my topic, I believe also that the whole market is starting to realize that IT services and software engineering, the right one with AI applied, is more needed than ever.
We need engineering companies to bring orchestration, governance, security, especially security, right, to our services. Large-scale programs are running. We just closed and presented one big one at Deutsche Bank, another one with Itaú, and some others that we are doing. I see that is a bright future. Going to be responsible with the projections.
Thank you for all the details.
Excellent. Currently there is no other question in the queue. Maybe I give you a few seconds to think about if every question was answered. Clock's ticking. Okay. Well, thank you. As there are no further questions, we will bring today's call to a close. Thank you all for your time, your questions, and your continued interest in GFT Technologies. Should you have any follow-up questions, please do not hesitate to contact the investor relations team. We wish you a pleasant day and look forward to speaking with many of you again over the coming weeks and months. Goodbye.
Goodbye, everybody.
Thank you very much.