Good morning, everyone. Welcome to CI&T earnings call for the third quarter of 2022. I am Eduardo Galvão, Head of Investor Relations at CI&T, and it's a pleasure to be here again to talk about our results. With me on today's call are Cesar Gon, Founder and CEO, Bruno Guicardi, Co-Founder and President for North America and Europe, and Stanley Rodrigues, our CFO.
This event is being recorded and all participants will be in a listen-only mode during the company's presentation. After that, there will be a question and answer session for analysts and investors only. If you'd like to submit a question, please send it via email to investors@ciandt.com. This presentation is available on the company's investor relations website at investors.ciandt.com. The replay will be available shortly after the event is concluded.
Some of the matters we'll discuss on this call, including our expected business outlook, are forward-looking statements and as such are subject to known and unknown risks and uncertainties, including but not limited to those factors described in our earnings release and discussed in the Risk Factors section of our annual report on Form 20-F and other reports we may file from time to time with the SEC.
These risks and uncertainties could cause actual results to differ materially from those expressed on this call. We caution you not to place undue reliance on those forward-looking statements because they're valid only as of the date when made. During this presentation, we'll comment on certain non-IFRS measures to evaluate our business. Please refer to the reconciliation table of non-IFRS measures in the appendix for more details.
Our agenda for today includes an update on recent events, followed by some of our successful business cases and a few highlights. We'll then talk about our people strategy and discuss our quarterly financial results. At this time, I would like to invite Cesar Gon to begin our presentation. Cesar, please.
Thanks, Eduardo. Good day, everyone, and thank you for joining us today. It's always a pleasure to be with you and have the opportunity to talk about CI&T, our latest news and results. Before we start, I want to mention a milestone for CI&T. Last week, we completed one year of the IPO at the New York Stock Exchange, launching what I believe will be the most exciting chapter of our journey.
With the cash proceeds of the IPO, we have expanded our operations globally through acquisitions, opening new markets and verticals, expanding our global talent base, and building a sustainable platform to speed up our organic growth. As you know, those 12 months were marked by a nontrivial macro environment. We have been in business for 27 years, and we have had the opportunity to face several of those cycles of abundance and downturn.
How have we achieved 27 years of consecutive profitable growth? In one word, adaptability. It's an essential part of our DNA and the core of our entrepreneurial organizational model, and it's also what's behind the results we are presenting today. I'm happy to be here for our fifth earnings call. Last month, we proudly announced the acquisition of NTERSOL, a U.S.-based company providing digital transformation services to leading companies in the financial sector.
Headquartered in Irvine, California, NTERSOL has been helping companies rethink and reshape their operations for the digital age. This acquisition has added more than 170 U.S.-based digital specialists to CI&T, including an executive roster of seasoned entrepreneurs, a core team of business strategists, digital product specialists, and highly skilled developers.
This move further expands CI&T's operations in North America, practically doubling our onshore team in the U.S. and bolstering the company's capabilities within the financial services industry. I'm excited to welcome the talented team of NTERSOL to the CI&T family. With NTERSOL, we conclude our first wave of acquisitions, and I would like to take this opportunity to add some colors to our approach.
First and foremost, we see acquisitions as an opportunity to speed up our organic growth, accelerating our presence and reputation in the specific geographies or verticals. In that sense, we designed a programmatic M&A plan that we have been executing in a very disciplined manner. In May 2021, we acquired Dextra in Brazil, and since our IPO in November last year, we concluded four acquisitions, Somo in the U.K., Box 1824 in Brazil, Transpire in Australia, and NTERSOL in the U.S.
Each of them is founder-led and has an evident cultural fit with CI&T. They're also growing and profitable companies supporting big clients through talented teams that complement our capabilities in different regions and verticals. We have been very selective, and our efforts are paying off with smooth integrations. These bolt-on acquisitions are being integrated as new growth units, guaranteeing an immediate and low-risk business integration.
To contextualize, Somo, Box 1824, and Transpire are already fully integrated from a business standpoint. NTERSOL will be operating as a new growth unit under the CI&T brand before the end of this year. A dedicated squad has been coordinating the integration process in each region. Our agile organizational model allows combining a rapid business integration while executing a careful back-office IT systems and process consolidation.
With these moves, we amplified our footprint for robust organic growth in our four operated regions: North America, Latin America, Europe, and Asia Pacific. So we conclude this first cycle of M&As by reinforcing that organic growth continues to be our primary focus and strategy for value creation.
That said, let's take a look at our quarterly financial highlights. We are glad to present another set of high revenue growth with solid profitability metrics. Our net revenue in the third quarter of twenty twenty-two grew forty-nine percent year over year, of which thirty-five percentage points were organic growth and fourteen percentage points were acquisitions. Eliminating FX fluctuation, our net revenue at custom currency grew fifty-one percent above our guidance of forty-six percent for the quarter.
We reached 147 clients with annual revenue above BRL 1 million, from 76 in the third quarter of 2021, adding 71 new clients in the last 12 months. The Adjusted EBITDA margin in the quarter was 19.2% and continues improving sequentially as planned. We ended the third quarter of 2022 with 6.9 thousand CI&Ters, a net addition of 1.5 thousand employees year-over-year.
I'm never tired of mentioning how proud we are of our consecutive revenue growth throughout 25 quarters, even during challenging times with events such as the COVID pandemic outbreak and the war in the Eastern Europe. This consistency demonstrates our ability to adapt according to market conditions and continue to generating value for our long-term clients. Stanley will dive into our financial results in more detail shortly.
Before that, I want to express my gratitude to all CI&Ters that have been committed to making this happen. Thank you. Now let's see some examples of our engagements with clients worldwide and some of our business highlights for the quarter.
BEES is a global digital ecosystem created by AB InBev with support from CI&T. The project began with the goal of developing a B2B platform for small retailers who were not reaping the same benefits from digital transformation as larger retailers. With a product mindset, the project evolved to an ecosystem approach with different features to facilitate access to ABI's products worldwide, and it was recently opened to other companies in the marketplace model.
To help customers thrive, BEES is designed to scale rapidly, reaching new countries with the ability to understand the needs of each region and adapt to them. In less than three years, BEES already represents 55% of ABI's revenue and is available in 19 countries. We collaborated to create an innovative global solution that completely reimagined our client opportunities.
Bayer, a life science company with a more than 150-year history and core competencies in the areas of healthcare and agriculture, reached out to CI&T to orchestrate the data organization for its Latin American agribusiness sector. This need came from the lack of data integration for deep analysis, which led the company to manual processes and lack of data-driven decision-making.
Using CI&T's proprietary data journey approach, Bayer was able to enhance its data capabilities to generate insights and democratize the most reliable data for the company. In just 70 working days, CI&T delivered to Bayer a data platform that considers with the first batch of analysis, governance, and accuracy in data management within the company. In this platform, Bayer can carry out descriptive analysis, and also it can have predictive insights and trends in a systematic fashion.
As initial results were made available, the project decreased Amazon Web Services development costs by 65%, increased trust in data, and enabled hybrid intelligence, facilitating machine learning and a data-driven culture.
PEXA is just over 10 years old itself as a business. Way back in the beginning, it was just a little small startup. When I joined, there was probably about 30 employees. Now, PEXA is a publicly listed business with global aspirations and way more than 500 employees. It's been quite a journey, and now we are looking into new areas of growth for the business. PEXA and Transpire have come together a few years ago, and, you know, one of the big items that we've worked with Transpire on is really our customer journey.
PEXA has quite a varied customer segmentation that we have to deal with. Lots of different segments, lots of different customers with lots of different needs. Transpire have worked with us to really document those. They've interviewed many of our customers. They've played back those journeys to the PEXA Group and the PEXA team.
Our relationship with PEXA is fantastic. It is one based on mutual respect. It's understanding what each party brings to the table, and importantly, it's based around shared values. We're both committed toward transforming. We understand that the status quo is not acceptable. The extraordinary thing about our relationship with PEXA is the support we get to actually bring about that transformation and deliver that outcome, that sort of human-centered approach that we're looking for.
I'm really protective of my customers, and for me, I always feel confident, and I think it's because I trust Transpire. I think having that level of trust means that I always feel confident knowing that a Transpire employee is going out to speak with our customers, that what they're gonna bring back is going to be really accurate and informative and valuable. I think for me, it ultimately comes down to that level of trust, particularly in my role and particularly when it comes to our customers. I think that's one of the most critical factors.
Planet supports 800,000 customers across 120 countries and is supported by a global workforce of 2,500 people. The company was founded as a tax-free shopping and payment specialist, assisting merchants, acquirers, and shoppers by providing digital payment services on a single platform that offers acquiring, processing, digital wallets, currency conversion, and other services.
In the last couple of years, Planet has expanded its business through the acquisition of a number of hospitality and hotel-based software businesses to create a truly integrated payment service. With the support of CI&T, Planet is undertaking a huge program of work to integrate its different platforms. CI&T were given the challenge to not only create a new lead-generating digital platform, but also undertake an in-depth customer experience study to determine a longer-term Google Tag Manager strategy and roadmap.
The project began in July 2022 with the simultaneous delivery of a customer-facing MVP that would begin to generate leads for the business and a jobs-to-be-done led strategy into customer needs, desired outcomes, and optimal journey. This culminated in a detailed two-year digital roadmap. The first iteration of the platform went live in November and is the foundation that will be built on over the coming months.
It consists of a single proposition website for the company, consolidating all service offers into an organized and digestible format that will allow the company to upsell, cross-sell, and attract new customers whose needs will be served with one of the first truly integrated payments platforms.
NTERSOL is a United States-based strategy and technology firm that helps leaders in financial services rethink and reshape their operations for the digital age. CI&T acquired the company in October to expand its presence within North America's banking, financial services, and insurance verticals. NTERSOL has deep expertise in these fields and a footprint of more than 170 digital specialists in the U.S., which perfectly fits our global growth ambitions.
For the 16th consecutive year, CI&T has been named a Great Place To Work in Brazil. In October, we reached the fourth in the ranking, our highest position ever. We consider this recognition and certifications in other countries as genuine feedback from our people about what it is like to work here and as a confirmation that we are on the right track. Web Summit brings together the people and companies redefining the global tech industry.
Based in Lisbon in 2022, we were in the event contributing with our view about the changes tech can make in breaking the status quo. Bruno Guicardi was one of the speakers shedding light on making products that speak. His panel discussed how digitalization enables you to scale up your operations. Post-scale-up, how companies can nurture individual relationships with your consumers and can offer tailored products and experiences. Participation in this event allows CI&T to be at the forefront of global tech discussions, contributing to building thought leadership.
What if a company could create business impact faster through software development excellence? Research shows that most existing software engineers worldwide are estimated to be working outside the technology industry, and this count is rapidly increasing. However, even though almost every industry has I.T. departments as critical areas for growth, most need help to have high-performance teams.
Our clients' capabilities to execute top-notch software development that is directly connected to the value creation of the business. The Powerhouse is a global network of technologists focused on improving team performance through digital accelerators, methods, and practices at the forefront of digital development.
We started our company in Melbourne, Australia, and today we have a national footprint with around 100 digital consultants who share in our mission, which is to weave humanity into technology. I'm so excited we are joining the CI&T family. It's clear that our cultures are aligned and so is our passion to leave a positive impact on the world through technology.
Hi, I'm Felipe Rubim, CI&T's Vice President for Asia Pacific. I'm super excited to have Transpire joining our CI&T family. Between the two companies' history and experience, there's just this perfect fit of our cultures, capabilities, and growth ambitions.
By combining our strengths, CI&T will be providing our end-to-end services capabilities, as well as our well-known global employer value proposition to the Australian market, also by bringing global innovation with scalability. By leveraging Transpire's footprint and experience, we will be providing additional capabilities to our clients in Asia, while also helping them activate additional value to their customers.
It's the beginning of a new era. New habits, new technologies, new connections. Everything new again. Changes that force us to transform, learn, adapt, be up to date and ahead. A critical question to consider, how to thrive in a post-digital transformation era? CI&T presents its new global approach to work with its clients.
Digital speed and efficiency. Speed and scale in four pillars for businesses to adapt to ever-evolving scenarios, developer velocity, application performance, strategic sourcing, and measurable outcomes. Discover the next step for companies after digital transformation with CI&T.
We started the Black Identity Program in 2020 to increase the representation of Black people within CI&T. Back then, our community was only about 10% of the company's employees. Although in Brazil, this community represents more than 50% of people. We designed the program to attract young professionals, train them through boot camps and real-world experiences, fostering their inclusion and capabilities to face real project at CI&T.
Also, we hired experienced professionals that showcase the importance of Black representation at different levels within the company. As a company, we had little brand awareness towards that community, and the program helped us to learn and engage with anti-racism strategies and policies. We did this in partnership with organizations whose sole purpose is to serve the community, taking an ecosystem approach.
Once the new talents arrived, we worked to guarantee their inclusion inside CI&T, working alongside leaders and teams about diversity, equity, and belonging. As a result of that initial effort, we hired 37 Black professionals, and two years after the program, 89% of those people are still CI&T employees. Finally, this work supported our Black community's growth and inspired new programs in the years that followed. Now, Black people make up about 20% of CI&T's workforce globally.
Since 2012, DevCamp has fostered innovation and technology for the developer community. For those passionate about deep tech, the event is the right spot. Look what happened in the 10th edition.
[Foreign Language] O DevCamp ele traz a vivência de outras pessoas e a inspiração que outras pessoas podem gerar no mercado, nas comunidades, nas pessoas, através das histórias que elas viveram, do conhecimento que elas aprenderam, e isso sirva como exemplo pra que as outras pessoas sigam e se desenvolvam. Pra gente é muito gratificante ver que o trabalho que a gente faz, né, essa contribuição, essa retribuição, na verdade, ela gera valor pras pessoas, as pessoas buscam e participam do DevCamp. A gente pensou exatamente nisso quando a gente tava bolando a ideia da floresta digital.
[Foreign Language] É uma floresta complexa, é difícil andar nessa floresta, mas os palestrantes trouxeram de uma forma bem fácil como navegar por diferentes partes dessa floresta. A CI&T foi fundamental na realização do evento. Ela aposta e ela tem esse interesse de contribuir com a comunidade de desenvolvimento. A realização foi toda CI&T, as pessoas da CI&T participaram, o que é muito gratificante pra gente.
Lots of cool stuff, right? Now I invite Bruno to talk about our global talent strategy.
Thank you, Cesar, and good morning, everyone. Great to be here again. Our global talent base continues expanding, and we ended the quarter with almost 6,900 CI&Ters, a 28% growth year-over-year. I'm very proud to tell you that last month, CI&T was ranked fourth in the Great Place To Work Brazil within the large companies category, and first among tech services companies, as presented in the video.
This is our 16th consecutive year being awarded this recognition in Brazil, and we also have been recognized as a Great Place To Work in all countries we operate. This remarkable achievement demonstrates our ability to keep attracting and retaining the best talent in the industry and providing them with an engaging and diverse environment where they can be themselves and reach their full potential.
As we expand our operations globally, we have strengthened our talent base in strategic regions to guarantee global coverage to our global clients. Recently, we increased our talent base in Australia with the acquisition of Transpire and expanded organically in Colombia and the U.K. Brazil used to represent 93% of our headcount a year ago and now represents 87%, and this trend of talent base diversification should continue going forward.
For example, with the acquisition of NTERSOL will practically double our on-site team in U.S., which is our fastest growing market. Finally, we continue to enhance our remote work and work from anywhere programs, integrating them into our daily operations and benefiting from what we think is a huge opportunity to tap into new markets for talent. Now, I invite Stanley to give you more details about our financial performance.
Thank you, Bruno, and good morning, everyone. Excited to walk you through our quarterly financial results. Our net revenue in the third quarter 2022 was BRL 559 million, a 49% growth year-over-year. The acquisitions concluded in 2022 contributed to 14 percentage points of revenue growth in the quarter.
When eliminating the FX variation, our net revenue at constant currency grew 51% compared to the third quarter of 2021. This performance is above our guidance of 46% of revenue growth at constant currency for the quarter. Our strong revenue growth reflects our land and expand strategy, combining expansion within existing clients and the addition of new clients every quarter. Our programmatic M&A strategy also contributed to speed up our revenue growth.
Throughout the nine months of 2022, we continued to diversify our client base with the addition of 53 new logos with revenue above BRL 1 million to our portfolio. The number of clients with revenue above BRL 20 million increased from 16 in 2021 to 22 clients year to date, while the number of clients with more than BRL 5 million and BRL 10 million also increased consistently.
Our net revenue retention rate over the past five years has been around 120%, which demonstrates that new logos should also expand and flourish over time, guaranteeing our sustainable growth towards 2023 and the following years. CI&T recorded revenue growth in the quarter within all regions and within all industry verticals that it operates year-over-year.
North America remains our fastest growing market organically, and it should be more representative as of the fourth quarter 2022 when we will incorporate the results of NTERSOL. The same is valid for Asia Pacific region with the consolidation of the Transpire results. As Cesar mentioned, our M&A strategy has been to expand our geographic footprint, creating a global platform for organic growth.
Analyzing the performance of our main industry verticals in the nine months of 2022 compared to the same period of last year, revenue from financial services grew 38%, food and beverage increased 27%, TMT grew 99%, and pharma and cosmetics increased 50%. Our client portfolio is pretty well balanced in terms of regions and industry verticals, as you can see in the chart.
Moving on, our Adjusted EBITDA in the third quarter was BRL 107.3 million, an increase of 34% year-over-year. Adjusted EBITDA margin was 19.2% in the quarter, a reduction of 2.1 percentage points compared to third quarter 2021, mainly as a result of two factors, lower margins from recently acquired companies and an increase in GNA expenses in light of our IPO.
Sequentially, the Adjusted EBITDA margin improved to 19.2% in the third quarter 2022 from 19.1% in the second quarter 2022 and 17.5% in the first quarter 2022 as a result of gradual price readjustments on our contracts, which is a seasonal effect. In the third quarter 2022, adjusted net profit was BRL 69.5 million, 157% higher than third quarter 2021.
The adjusted net profit margin was 12.4%, an increase of 5.2 percentage points, and it was mainly due to two factors. Lower net financial expenses as a result of positive foreign exchange variations in the third quarter 2022, partially compensated by higher interest rates on loans.
A reduction in income tax expenses because of our corporate reorganization concluded at the end of last year in connection with our IPO. Wrapping up, as Cesar mentioned, our priority continues to be fostering our organic growth, including leveraging the recently acquired companies. Now, I invite back Cesar to comment on our business outlook. Cesar, please.
Thank you, Stanley. Based on current market conditions, we expect our net revenue in the fourth quarter of 2022 to be at least BRL 605 million, a 41% growth year-over-year on a constant currency basis. For the full year of 2022, we are increasing our outlook and expect net revenue growth of at least 58% year-over-year on a constant currency basis.
Reported revenue growth of at least 51%, which includes a negative FX impact of approximately seven percentage points. We are maintaining our Adjusted EBITDA margin guidance of at least 19% for the full year of 2022. Thank you all for your trust in CI&T, and for attending our call today. We now conclude our presentation and may move to the Q&A session. Thank you.
All right. We'll now begin the question-and-answer session. I will announce each participant's name. Once you hear your name, please unmute your line and ask a question. When you're done, please mute your line. The first question come from Puneet Jain from JP Morgan. Puneet, please go ahead.
Hey, thanks for taking my question, and nice quarter. I wanted to ask about client priorities, if you've seen any changes there over the last three months. Are you seeing any delays in new project starts or clients preferring cost-saving deals over digital transformation at all? Have you seen any changes in the way clients award new contracts or the type of projects that they award?
Thank you, Puneet. I can get this one. I believe we still see a strong pipeline from our clients. There is some trends-related demand, as you mentioned. I think we can see on two perspectives. First is speed. I think customers are selecting initiatives based on the time to return. Shorter cycles between investment and getting evidence of the results.
A second trend is efficiency. I think it's important in such a macro environment. Our metrics demonstrate that a high-performance team can deliver 10 times more than a low-performance team. There's a lot of opportunities to increase throughput without necessarily increasing investment.
I believe these two trends, speed in the sense of time to return, shorter cycles for see concrete results on the digital initiatives, and efficiency. Here's discussion about how we can do more with the investment we are already doing around digital.
Got it. No, that makes sense. If you can talk about, directionally, expectations for 2023 growth. Lot of concerns around macro there, not just for you, but generally for the sector. How should we think about, like, as we build our model, 2023 trends, growth trends on constant currency organic basis?
Sure, we are still working on our 2023 budget. We will disclose a full year guidance on our next earnings release. What I can anticipate is after this solid 2022, we expect another solid year, even considering the macro environment. I think we have, by now, great visibility from our long-term clients.
As Bruno and Stanley mentioned, we have a consistent net revenue retention rate in the past, and we foresee that will continue. This year, we added 53 new long-term clients in the last nine months, so new platforms for growth. I think we create a robust footprint for growth with the recent acquisitions in different regions. Now we have a better footprint for Australia, for U.K., for even for U.S. with NTERSOL. We are still working on this, but we are confident in our ability to deliver solid growth next year, as demonstrated by our track record.
Got it. Thank you. All the best.
My pleasure. Thank you, Puneet.
Thank you, Puneet. Our next question comes from Tyler DuPont from Bank of America. Tyler, go ahead.
Thank you. Thank you for taking the question. Just jumping off of Puneet's earlier question, are there specific geographies or verticals that are seeing particular signs of strength or weakness in the conversations you're having with clients around that? I mean, when looking at each vertical, it looks like there's pretty strong growth sequentially, particularly within TMT. Is there anything also specific to call out there? Maybe just comparing that to financial services, which looks like it was relatively flat quarter-on-quarter.
Thank you. Tyler, I can start this one too. We don't see any specific difference. We have been growing consistently in all verticals and geographies. I believe there's big trends on specific verticals. I can highlight financial services is too strong, I think mainly based to the customer experience of war from the competition among the traditional big players and the fintechs.
We see new trends coming from crypto and blockchain use case around trading, custody of digital assets, international payments, peer-to-peer transaction, NFTs and so on. We see open banking, not only the regulatory demand, but also new services like personal finance, payment insurance and other services. If we go for retail, we see massive investments around e-commerce, omnichannel and marketplace strategies too, a big trend in this sector.
Now, I think combining with maybe more advanced programs around data with advanced analytics, machine learning approach, providing, I would say, valuable and actionable recommendations for retail companies. A trend of combining sales journey in-store and online logistics around same-day delivery and discount payments.
A lot of new stuff comes on the payment and so on. If we go for consumer goods, I think data is the main use case, especially using predictive analytics and big data to understand consumer behaviors and foster digital sales or accelerate product development. Mobility. A lot of innovation around mobility, connecting wearables and a lot of use case around that too. I think this is across the board.
Of course, as I mentioned, every single product now has a meticulous discussion about the value is what it's gonna be created, the speed you can demonstrate the results and efficiency, how productive the teams are and how effective you are along these opportunities.
Okay, great. Well, I appreciate that. Just kind of on the other side, on the supply side, maybe if you could speak to any of those specific supply side dynamics that you're seeing, whether that's, you know, attrition, utilization, and if you're seeing any wage inflation pressures still, or if those have subsided. Just kind of update how that flows into margins. That'll be helpful. Thank you.
Bruno, can you get this one?
I can. Yeah, I can take that one. Yeah. We're seeing as, you know, that competition subsiding a little bit with the recent, you know, slowdown and with the startup world and Big Tech, right? Attrition is trending down. We're down one notch to 15% compared to 16% last quarter on a last 12-month basis.
We're expecting that it will continue to go down going forward, right? That's good news. It's still a hot market, right? I think we're back to levels pre-pandemic, which is not necessarily, you know, kind of a easy market. It's still very competitive, but it's certainly subside a bit from what we were, you know, like 9-12 months ago.
Okay, great. Thank you. Appreciate all the color.
Thank you, Tyler. The next question comes from Diego Aragao from Goldman Sachs. Diego, go ahead.
Yes. Good morning, everyone. Thanks for taking my question. First, congratulations on the quarter. Very nice print. I guess my first question is just a follow-up on the previous one about your pipeline of projects. You mentioned a good number of new clients additions this quarter. Are you seeing existing clients postponing projects or even, like, increasing the timeline of, you know, digital transformation projects given current macroeconomic environment? Thank you.
Thank you, Diego. Great to see you, man. Well, Diego, I think I mentioned that. I think there is a more meticulous process in the client side. They are looking careful what to do and what start doing, what stop doing. Basically, I think it's regarding this time to return. I think this is the main point of decision. Are we investing on initiatives that we see we can get returns, concrete returns in short cycles?
I think this resonate a lot with CI&T value prop of combining strategy, design and the full stack software engineering to deliver shorter results, to show evidence that that initiative or that set of hypothesis are correct, are the right place to invest. Long sales cycle for sure, for everyone across the board because of this meticulous analysis of what we should do or not due to this economic macro environment.
Thanks, Cesar. This makes a lot of sense. I guess my second question is about M&A. You did a couple of transactions since the IPO last year, so I was wondering if you would consider doing further, you know, deals in 2023 or actually, you know, the coming year would be more focused on properly integrating these companies and extracting, let's say, the potential synergies you were seeing from those businesses. Thank you.
Amazing question, Diego. Basically I think with NTERSOL, we are ending this, I would say, first wave of M&A using the proceeds of the IPO as I mentioned. Basically with that, we created an amazing footprint especially in the regions, the Asia Pacific with the acquisition of Transpire in Australia and also in Europe with the acquisition of Somo in the U.K.
New vertical expertise, new capabilities with NTERSOL in the USA in financial services. I think this is an amazing footprint for future growth too. Now, as you mentioned, our priority is to leverage this platform for organic growth. I think organic growth is our main value creation strategy and M&A is just a way to speed up our presence, especially in new verticals and geographies. You should expect now a lot of focus on leveraging these platforms, and we are very confident that these moves were a spectacular add to our footprint.
It's so clear, Cesar. Thank you.
My pleasure, Diego.
Thanks, Diego. Our next question comes from Ashwin from Citi. Ashwin, please.
Thank you. My question is with regards to M&A and more about how much M&A you could be kind of doing it at once. What's your bandwidth to handle multiple M&A all at the same time in terms of integration and so on and so forth? I guess the follow-up to that is would we expect a slowdown in M&A given that you have so much on your plate right now?
Yeah, I can start, and then Stanley can chime in. Ashwin, I think we have an amazing strategy for leveraging the companies we acquire. I think probably you remember CI&T has this entrepreneur organizational model based on growth units, independent growth units. By now, we have 31 growth units around the world.
Every company we acquired, we integrate as a new growth unit. That gives a lot of stability in this process of integrating because we keep the customer being supported by the same teams, by the same leaders, and incrementally adding CI&T global muscles to each one of these operations. In the business perspective, this allow us a very low risk integration. Of course, we select careful the targets.
Companies with a very solid customer base, with a very, I would say near CI&T culture, leadership type and so on. I think this is basically criteria that allow us to execute the business integration in a very smooth way. Of course, there's a more careful process regarding back-office system process integration.
It happens in a different timeline. Having said that, I think as I mentioned, we are concluding an amazing first wave of M&A. I think M&A will be a long-term strategy for speed up our organic growth. Now we are totally focused on leveraging those new platforms. I don't know, Stanley, if you just want to chime in and add some colors.
Yes, César. What I would add to that is that in parallel, going back to the question how we can proceed parallel integration. Basically, when we started, for example, in Australia, we first sent executives, you know, on a greenfield mode, let's say, to understand the market. Later down the road, we made acquisition and from there we have both teams already, the CI&T and Transpire teams working together in that geography.
The same thing happens in Somo, same fashion. We went first in greenfield mode, and then we have those executives, CI&Ters, together with Somo and so on. The parallelism happens because we have teams, different geographies independently working in that growth unit approach that César mentioned.
Of course, those things will connect back to the back-office, which is a different streamline. We've been proceeding the many integrations in parallel as well. Of course, we have a preparation in parallel going on, and that allow us to do the many acquisitions also in the systems and back-office perspective. Mainly that's the approach.
U-understood. Thank you. Thank you for that. Uh, the other question I have is with regards to just talking about the specific acquisitions themselves, and it was good to see the, uh, videos on, uh, on Transpire and, uh, and so on with the emphasis on culture.
Um, the question is, you know, if you could provide a little bit more granularity on, um, you know, where their clients are, the relative profitability, the relative billing rates, things like that for them and for InterSol. I would imagine InterSol being US has higher billing rates. Um, uh, how should one think of the contribution of those financially? Um, and I'm sorry if you covered it in different parts, I might have missed it, but you could go into that.
Sure. Ashwin, I will start this one too. I think these companies, the three acquisition, especially Transpire, Somo and NTERSOL, these are companies that work basically with onshore teams, so you can expect higher price and also higher costs. These companies normally operate in a range of the mid-teens in terms of EBITDA below CI&T EBITDA, that is in the range of 20%.
We expect that along 1-3 years, we can add the nearshore component, our global technology perspective in this current client portfolio and bring their EBITDA to the levels of CI&T. This is part of the value creation we see for each one of these acquired company.
Of course, there's a lot of opportunities on cross-selling on scale, those engagements and leverage in adding new capabilities platforms. I think that as a 7,000 company can provide to a customer. Stanley, do you want to add more colors on the specifics?
Yeah. What I would add that that's the main objective when we go with this M&A strategies, is to add that to expand faster our capacity for organic growth. Of course, as we expand in the many different geographies, but we'll have a different blend of onshoring, nearshoring, and that will be evolving throughout the time. We should expect that changing profile in the blend, let's say.
In both ways, because at the same time that we acquire some operations that they are heavily based on onshoring, we also want to add nearshore capacity to that operation. Both worlds will evolve, let's say, together in parallel.
Understood. Thank you.
Thank you.
Thank you, Ashwin. We have a question from email here from Cesar Medina from Morgan Stanley. Can you please elaborate on the discussions you're now having for your 2023 budget for growth, even if not a specific guide, maybe some big picture trends? Some of your peers in the industry have noted to below 20% growth next year. Could this be the case for CI&T, especially with what is happening on the fiscal front post-election?
I can get this one. Thank you, Medina. As I mentioned, we are still working on our 2023 budget, and we would full disclosure our guidance in our next call. We are really confident that after this solid 2022, even considering the macro environment, again, we have good visibility from our long-term clients. We have a good number of new clients, and we mentioned 53 new clients onboarding in the last nine months.
This footprint of new M&A, from the M&A, new geographies and verticals we can explore. Basically, we are confident on our ability. Of course, there is a lot of adaptation in our strategy, go-to-market strategy. I mentioned a lot of emphasis on speed, efficiency.
There's always opportunity when there's a change in the macro environment, and it depends on your ability to adapt the way you are approaching each one of your clients, the kind of relationship you establish, and you can leverage opportunities even on a more, say, cloudy macro environment. We are still working on that, but we are confident we will provide another solid year.
Thank you, Cesar. That concludes our Q&A session. Thank you all for attending our event today. I'll now invite Cesar to proceed with his closing remarks. Cesar?
Thanks. Thank you, Eduardo, Stanley, Bruno, for joining me today. Thank you all for participating in another call again. I want to thank all CI&Ters for the amazing impact we are delivering as a team, and clients, investors and partners for their continued support. Of course, a great FIFA World Cup for everyone. Stay well, and I'm looking forward to seeing you all in a couple of months. Bye.