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CI&T Reports Solid Third Quarter 2022 Financial and Operational Results

CI&T (NYSE: CINT, “Company”), a global digital specialist, today announces its results for the third quarter of 2022 (3Q22) and the nine months ended on September 30, 2022 (9M22) in accordance with International Financial Reporting Standards (IFRS). For comparison purposes, we refer to the results for the third quarter of 2021 (3Q21) and for the nine months ended on September 30, 2021 (9M21).

Third Quarter (3Q22) Operating and Financial Highlights

  • Net Revenue was R$559.0 million, an increase of 48.7% compared to 3Q21 or a 51.3% growth at constant currency.
  • The number of clients with annual revenue above R$1 million in the last twelve months grew from 76 in 3Q21 to 147 in 3Q22.
  • Net Profit was R$40.6 million compared to a net loss of R$2.2 million in 3Q21.
  • Adjusted EBITDA was R$107.3 million, a 34.1% growth year-over-year, equivalent to an Adjusted EBITDA margin of 19.2%.
  • Adjusted Net Profit was R$69.5 million, 156.7% higher than 3Q21. Adjusted net profit margin was 12.4%.
  • CI&T ended 3Q22 with 6,887 CI&Ters, a net addition of 1,489 employees (27.6% growth) compared to the end of 3Q21.

Nine months ended September 30, 2022 (9M22) Operating and Financial Highlights

  • Net Revenue was R$1,575.9 million, an increase of 59.6% compared to 9M21, or a 65.5% growth at a constant currency.
  • Net Profit was R$95.8 million, an increase of 16.7% in relation to 9M21.
  • Adjusted EBITDA was R$293.8 million, 32.2% higher than 9M21, with an Adjusted EBITDA margin of 18.6%.
  • Adjusted Net Profit was R$162.9 million, an increase of 45.6% compared to 9M21.

Cesar Gon, founder and CEO of CI&T, commented, "As we complete one year of our debut in the capital markets, I am excited to share another set of high growth with sound profitability results. With the cash proceeds of the IPO, we have expanded our operations globally through acquisitions, opening new markets and verticals, and extending our global talent base. With these moves, we amplified our footprint for robust organic growth in our four operating regions: North America, Latin America, Europe, and Asia Pacific."

"A nontrivial macro environment marked these twelve months. Nevertheless, Digital transformation is a secular trend and remains a priority in the corporate world. And CI&T positioning and value proposition focused on speed and digital efficiency resonates extremely well with large and innovative companies."

Comments on the 3Q22 financial performance

In 3Q22, the net revenue was R$559.0 million, an increase of 48.7% compared to 3Q21, or a 51.3% net revenue growth at constant currency. The acquisitions of Somo, Box 1824, and Transpire concluded in 2022 contributed to 14 percentage points of revenue growth in the quarter compared to 3Q21.

We added 20 new clients to our portfolio in 3Q22 (with annual revenue above R$1.0 million in the last twelve months), increasing our client base from 127 in 2Q22 to 147 in 3Q22. We maintained a solid year-over-year growth across all regions and all industry verticals we operate.

The cost of services provided in 3Q22 reached R$363.6 million, an increase of 47.3% compared to 3Q21, and the gross profit was R$195.4 million. Excluding costs with depreciation and amortization and stock-based compensation, the adjusted gross profit in 3Q22 was R$206.5 million, 47.9% higher than in 3Q21. The adjusted gross profit margin was 36.9%, a slight decrease compared to 37.1% in 3Q21, mainly due to lower margins from recently acquired companies.

In 3Q22, selling, general and administrative (SG&A), and other operating expenses were R$130.8 million, an increase of 45.3% compared to 3Q21, mainly due to (i) acquisition-related expenses, including bonus retention, consulting expenses, and amortization of intangible assets from acquired companies; and (ii) the strengthening of our back-office teams in connection with our IPO.

In 3Q22, the Adjusted EBITDA was R$107.4 million, an increase of 34.1% compared to 3Q21. Adjusted EBITDA margin was 19.2% in the quarter, a reduction of 2.1 percentage points compared to 3Q21, mainly due to the increase in SG&A expenses. Sequentially, the Adjusted EBITDA margin improved to 19.2% in 3Q22 from 19.1% in 2Q22 and 17.5% in 1Q22, as a result of gradual price readjustments on our contracts, a seasonal effect.

In 3Q22, net financial expenses were R$7.4 million, a decrease of 66.8% compared to 3Q21, as a result of positive foreign exchange variations in 3Q22, partially compensated by higher interest rates on loans.

In 3Q22, depreciation and amortization expenses totaled R$23.6 million, an increase of 67.3% or R$9.5 million compared to 3Q21, due to the amortization of R$10.3 million from intangible assets from acquired companies.

In 3Q22, income tax expense was R$16.5 million, a reduction of 12.3% compared to 3Q21. In the 9M22, income tax expense was R$49.8 million, a reduction of 13.3% year over year, while the income tax paid (cash effect) was R$33.5 million in the period, equivalent to a cash tax rate of 23%.

In 3Q22, the net profit was R$40.6 million, compared to a net loss of R$2.2 million in 3Q21. Adjusted net profit was R$69.5 million, 156.7% higher than 3Q21, equivalent to an adjusted net profit margin of 12.4%. The increase in the adjusted net profit margin was mainly due to a reduction in financial expenses, income tax expenses, and depreciation of property, plant, and equipment.

Business Outlook

We expect our net revenue in the fourth quarter of 2022 to be at least R$605 million compared to a net revenue of R$457 million in the fourth quarter of 2021, a 41% growth at constant currency or a 32% growth on a reported basis, which includes a negative foreign currency translation impact of approximately nine percentage points.

For the full year of 2022, we are increasing our outlook and expect a net revenue growth at constant currency of at least 58% year-over-year and net revenue growth on a reported basis of at least 51%, which includes a negative foreign currency translation impact of approximately seven percentage points.

In addition, we estimate our adjusted EBITDA margin to be at least 19% for the full year of 2022, assuming an average exchange rate of 5.10 Brazilian Reais to the U.S. dollar for the full year.

These expectations are forward-looking statements and actual results may differ materially. See "Cautionary Statement on Forward-Looking Statements" below.

Conference Call Information

Cesar Gon, Bruno Guicardi, Stanley Rodrigues, and Eduardo Galvão will host a video conference call to discuss the 3Q22 and 9M22 financial and operating results on November 17 at 8:00 a.m. Eastern Time / 10:00 a.m. BRT. The earnings call can be accessed at the Company’s Investor Relations website at https://investors.ciandt.com or at the following link: https://www.youtube.com/watch?v=qeVVSmOaVAg.

About CI&T

CI&T (NYSE:CINT) is a global digital specialist, a partner in digital transformation for 100+ large enterprises and fast growth clients. As digital natives, CI&T brings a 27-year track record of accelerating business impact through complete and scalable digital solutions. With a global presence in nine countries with a nearshore delivery model, CI&T provides strategy, data science, design, and engineering, unlocking top-line growth, improving customer experience, and driving operational efficiency. Recognized by Forrester as a Leader in Modern Application Development Services, CI&T is the Employer of Choice for more than 6,800 professionals.

Basis of accounting and functional currency

CI&T maintains its books and records in Brazilian reais, the presentation currency for its unaudited condensed consolidated interim financial statements, and the functional currency of our operations in Brazil. CI&T prepares its unaudited condensed consolidated interim financial statements in accordance with IFRS, as issued by the IASB, and International Financial Reporting Standard No 34—Interim Financial Reporting (“IAS 34”).

Non-IFRS Financial Measures

We regularly monitor certain financial and operating metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. These non-IFRS financial measures include Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Profit, Adjusted Net Profit Margin, Net Revenue at Constant Currency, and Net Revenue Growth at Constant Currency, and should be considered in addition to results prepared in accordance with IFRS, but not as substitutes for IFRS results. In addition, our calculation of these non-IFRS financial measures may differ from those used by other companies, and therefore comparability may be limited. These non-IFRS financial measures are provided as additional information to enhance investors’ overall understanding of our operations’ historical and current financial performance.

CI&T is not providing a quantitative reconciliation of forward-looking Non-IFRS Net Revenue Growth at Constant Currency and Adjusted EBITDA to the most directly comparable IFRS measure because it is unable to reasonably predict the ultimate outcome of certain significant items without unreasonable efforts. These items include, but are not limited to, stock-based compensation expenses, acquisition-related expenses, the tax effect of non-IFRS adjustments, and other items. These items are uncertain, depend on various factors, and could have a material impact on IFRS reported results for the guidance period.

We calculate Net Revenue at Constant Currency and Net Revenue Growth at Constant Currency by translating Net revenue from entities reporting in foreign currencies into Brazilian reais using the comparable foreign currency exchange average rates from the prior period to show changes in our revenue without giving effect to period-to-period currency fluctuations. Reported Net Revenue in 2021 considers the FX rate at the end of each month, while Net Revenue at Constant Currency considers the average FX rate for the period.

In calculating Adjusted Gross Profit, we exclude cost components unrelated to the direct management of our services. For the periods herein, the adjustments applied were: (i) depreciation and amortization related to costs of services provided; and (ii) stock-based compensation expenses.

In calculating Adjusted EBITDA, we exclude components unrelated to the direct management of our services. For the periods herein, the adjustments were: (i) stock-based compensation expenses; (ii) consulting expenses related to the initial public offering and corporate reorganization; (iii) government grants related to tax reimbursement in the Chinese subsidiary; (iv) non-cash expenses related to the write-off due to inventory of property, plant, and equipment, tax write-off, and the impairment related to the discontinuation of certain investments made by Dextra on intangible assets related to digital platforms; and (v) acquisition-related expenses, including fair value adjustment on accounts payable for business combination, consulting expenses and retention bonuses.

In calculating Adjusted Net Profit, we exclude cost components unrelated to the direct management of our services. For the periods herein, the adjustments applied were: (i) consulting expenses related to the initial public offering and corporate reorganization, (ii) non-cash expenses related to the write-off due to the inventory of property, plant, and equipment, tax write-off, and the impairment related to the discontinuation of certain investments made by Dextra on intangible assets related to digital platforms; and (iii) acquisition-related expenses, including amortization of intangible assets from acquired companies, fair value adjustment on account payables for business combination, consulting expenses and retention bonuses.

Cautionary Statement on Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, which include but are not limited to: the statements under "Business outlook," including expectations relating to revenues and other financial or business metrics; statements regarding relationships with clients; and any other statements of expectation or belief. The words “believe,” “will,” “may,” “may have,” “would,” “estimate,” “continues,” “anticipates,” “intends,” “plans,” “expects,” “budget,” "scheduled,” “forecasts” and similar words are intended to identify estimates and forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements represent our management's beliefs and assumptions only as of the date of this press release. You should read this press release with the understanding that our actual future results may be materially different from what we expect. These statements are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from results expressed or implied in this press release. Such risk factors include, but are not limited to, those related to: the current and future impact of the COVID-19 pandemic, the ongoing war in Ukraine and economic sanctions imposed by Western economies over Russia on our business and industry; the effects of competition on our business; uncertainty regarding the demand for and market utilization of our services; the ability to maintain or acquire new client relationships; general business and economic conditions; our ability to successfully integrate Dextra, Somo, Box 1824, Transpire and Ntersol; and our ability to successfully execute our growth strategy and strategic plans. Additional information concerning these and other risks and uncertainties are contained in the "Risk Factors" section of CI&T's annual report on Form 20-F. Additional information will be made available in our annual reports on Form 20-F, and other filings and reports that CI&T may file from time to time with the SEC. Except as required by law, CI&T assumes no obligation and does not intend to update these forward-looking statements or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Unaudited condensed consolidated statement of profit or loss

 

(In thousands of Brazilian Reais)

 

 

Quarter ended September 30,

 

Nine months ended September 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

Net Revenue

559,018

 

 

375,970

 

 

1,575,905

 

 

987,586

 

Costs of services provided

(363,617

)

 

(246,846

)

 

(1,034,111

)

 

(640,986

)

Gross Profit

195,401

 

 

129,124

 

 

541,794

 

 

346,600

 

 

 

 

 

 

 

 

 

Selling expenses

(43,337

)

 

(24,122

)

 

(118,428

)

 

(61,902

)

General and administrative expenses

(84,804

)

 

(38,966

)

 

(228,115

)

 

(93,056

)

Research and technological innovation expenses

-

 

 

-

 

 

-

 

 

(4

)

Impairment loss on trade receivables and contract assets

325

 

 

(1,662

)

 

(385

)

 

(2,030

)

Other income (expenses) net

(3,008

)

 

(25,309

)

 

(7,492

)

 

(23,862

)

 

 

 

 

 

 

 

 

Operating profit before financial income and tax

64,577

 

 

39,065

 

 

187,374

 

 

165,746

 

 

 

 

 

 

 

 

 

Finance income

32,750

 

 

17,591

 

 

155,638

 

 

43,421

 

Finance cost

(40,182

)

 

(40,007

)

 

(197,315

)

 

(69,523

)

Net finance costs

(7,432

)

 

(22,416

)

 

(41,677

)

 

(26,102

)

 

 

 

 

 

 

 

 

Profit before Income tax

57,145

 

 

16,649

 

 

145,697

 

 

139,644

 

Income tax expense

 

 

 

 

 

 

 

Current

(22,273

)

 

(28,809

)

 

(44,796

)

 

(63,367

)

Deferred

5,736

 

 

9,952

 

 

(5,071

)

 

5,852

 

Net profit for the period

40,608

 

 

(2,208

)

 

95,830

 

 

82,129

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

Earnings per share – basic (in R$)

0.30

 

 

(0.02

)

 

0.72

 

 

0.68

 

Earnings per share – diluted (in R$)

0.30

 

 

(0.02

)

 

0.72

 

 

0.67

 

 

 

 

 

 

 

 

 

Weighted average number of basic shares held by shareholders

133,332,778

 

 

119,960,451

 

 

133,006,973

 

 

119,960,422

 

Weighted average number of diluted shares held by shareholder

133,332,778

 

 

119,960,451

 

 

133,006,973

 

 

122,895,435

 

Unaudited condensed consolidated statements of financial position

 

(In thousands of Brazilian Reais)

 

Assets

September 30,

2022

 

December 31,

2021

 

Liabilities and equity

September 30,

2022

 

December 31,

2021

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

151,850

 

135,727

 

Suppliers and other payables

26,512

 

 

33,566

Financial Investments

181,857

 

798,786

 

Loans and borrowings

252,629

 

 

164,403

Trade receivables

462,793

 

340,519

 

Lease liabilities

29,199

 

 

21,214

Contract assets

229,165

 

134,388

 

Salaries and welfare charges

256,028

 

 

234,173

Recoverable taxes

6,667

 

7,785

 

Accounts payable for business combination

63,947

 

 

48,923

Tax assets

1,089

 

2,810

 

Loss adjustments on hedge accounting

50,315

 

 

-

Gain adjustments on hedge accounting

13,028

 

-

 

Derivatives

6,095

 

 

535

Derivatives

11,775

 

896

 

Tax liabilities

3,379

 

 

13,345

Other assets

33,173

 

29,994

 

Other taxes payable

14,173

 

 

5,423

Total current assets

1,091,397

 

1,450,905

 

Contract liability

11,760

 

 

13,722

 

 

 

 

 

Other liabilities

34,133

 

 

13,669

Recoverable taxes

3,591

 

3,046

 

Total current liabilities

748,170

 

 

548,973

Deferred tax assets

34,285

 

31,989

 

 

 

 

 

Judicial deposits

9,468

 

3,079

 

Loans and borrowings

453,729

 

 

624,306

Restricted cash - Escrow account and indemnity asset

32,877

 

-

 

Lease liabilities

50,722

 

 

60,674

Other assets

3,925

 

2,974

 

Provisions

14,587

 

 

633

Property, plant and equipment

60,376

 

57,721

 

Accounts payable for business combination

55,279

 

 

36,803

Intangible assets and goodwill

1,123,626

 

738,803

 

Other liabilities

2,020

 

 

1,660

Right-of-use assets

70,366

 

73,827

 

Total non-current liabilities

576,337

 

 

724,076

Total non-current assets

1,338,514

 

911,439

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Share capital

37

 

 

36

 

 

 

 

 

Share premium

946,173

 

 

915,947

 

 

 

 

 

Capital reserves

26,045

 

 

10,105

 

 

 

 

 

Profit reserves

221,787

 

 

125,957

 

 

 

 

 

Other comprehensive income

(88,638

)

 

37,250

 

 

 

 

 

Total equity

1,105,404

 

 

1,089,295

 

 

 

 

 

 

 

 

 

Total assets

2,429,911

 

2,362,344

 

Total equity and liabilities

2,429,911

 

 

2,362,344

Unaudited condensed consolidated statement of cash flow

 

(In thousands of Brazilian Reais)

 

 

September 30,

2022

 

September 30,

2021

 

 

 

 

Net profit for the period

95,830

 

 

82,129

 

Adjustments for:

 

 

 

Depreciation and amortization

67,154

 

 

30,102

 

Loss on the sale of property, plant and equipment and intangible assets

2,137

 

 

338

 

Interest, monetary variation and exchange rate changes

29,562

 

 

25,998

 

Exchange rate changes and monetary adjustments on accounts payable for business combinations

(7,601

)

 

-

 

Exchange variation on escrow account related to Somo acquisition

3,798

 

 

-

 

Interest on lease

6,306

 

 

4,409

 

Unrealized loss (gain) on financial instruments

(5,709

)

 

3,898

 

Income tax expenses

49,867

 

 

57,515

 

Impairment losses on trade receivables

203

 

 

1,112

 

Impairment losses on contract assets

182

 

 

918

 

Provision for labor and tax risks

386

 

 

346

 

Impairment of intangible assets

-

 

 

21,818

 

Share-based plan

1,894

 

 

694

 

Income on financial investments

(1,628

)

 

-

 

Fair value adjustment - accounts payable for business combination

5,243

 

 

-

 

Price adjustment - accounts payable for business combination

1,997

 

 

-

 

Others

(1,824

)

 

52

 

Variation in operating assets and liabilities

 

 

 

Trade receivables

(107,311

)

 

(87,669

)

Contract assets

(85,091

)

 

(67,530

)

Recoverable taxes

(2,297

)

 

(13,260

)

Tax assets

930

 

 

(2

)

Judicial deposits

(6,389

)

 

7

 

Suppliers and other payables

(34,281

)

 

4,075

 

Salaries and welfare charges

7,448

 

 

43,788

 

Tax liabilities

1,568

 

 

(3,797

)

Other taxes payable

4,509

 

 

1,448

 

Contract liabilities

(4,893

)

 

(9,036

)

Payment of share-based indemnity

-

 

 

(628

)

Other receivables and payables, net

6,714

 

 

(6,538

)

Cash (used in)/ generated from operating activities

28,704

 

 

90,187

 

Income tax paid

(33,467

)

 

(44,468

)

Interest paid on loans and borrowings

(51,152

)

 

(2,296

)

Interest paid on lease

(4,796

)

 

(3,972

)

Net cash used in operating activities

(60,711

)

 

39,451

 

Cash flows from investment activities:

 

 

 

Acquisition of property, plant and equipment and intangible assets

(20,163

)

 

(22,112

)

Acquisition of subsidiary net of cash acquired – Dextra

-

 

 

(641,784

)

Acquisition of subsidiary net of cash acquired - Somo

(247,764

)

 

-

 

Acquisition of subsidiary net of cash acquired - Box 1824

(19,040

)

 

-

 

Acquisition of subsidiary net of cash acquired - Transpire

(54,995

)

 

-

 

Escrow deposit (acquisition of Somo)

(23,061

)

 

-

 

Hedge accounting realization

20,981

 

 

-

 

Redemption of financial investments

582,367

 

 

-

 

Payment of investment obligations - Dextra

(62,338

)

 

-

 

Net cash from / used in investment activities

175,987

 

 

(663,896

)

Cash flow from financing activities:

 

 

 

Share-based plan contributions

-

 

 

989

 

Dividends paid

-

 

 

(71,039

)

Exercised stock options

10,339

 

 

-

 

Interest on equity, paid

-

 

 

(713

)

Payment of lease liabilities

(19,828

)

 

(12,407

)

Proceeds from loans and borrowings

186,239

 

 

740,596

 

Settlement of derivatives

390

 

 

-

 

Payment of loans and borrowings

(279,940

)

 

(71,702

)

Net cash from financing activities

(102,800

)

 

585,724

 

Net decrease in cash and cash equivalents

12,476

 

 

(38,721

)

Cash and cash equivalents as of January 1st

135,727

 

 

162,827

 

Exchange variation effect on cash and cash equivalents

3,647

 

 

(2,937

)

Cash reduction due to spin-off effect

-

 

 

(7,752

)

Cash and cash equivalents as of September

151,850

 

 

113,417

 

Reconciliation of Non-IFRS financial measures to comparable IFRS financial measures

 

(Unaudited)

 

Reconciliation of revenue growth as reported on a IFRS basis to revenue growth on a constant currency basis:

 

Net Revenue

(in BRL thousand)

3Q22

3Q21

Var.

3Q22 x 3Q21

9M22

9M21

Var.

9M22 x 9M21

Net Revenue

559,018

375,970

48.7%

1,575,905

987,586

59.6%

Net Revenue at Constant Currency

568,759

375,812

51.3%

1,634,761

987,953

65.5%

Revenue Breakdown

 

Net Revenue by industry

(in BRL thousand)

3Q22

3Q21

Var.

3Q22 x 3Q21

9M22

9M21

Var.

9M22 x 9M21

Financial Services

161,185

134,984

19.4%

476,250

345,073

38.0%

Food and Beverages

114,835

78,258

46.7%

316,891

250,426

26.5%

Technology, Media and Telecom

77,710

45,515

70.7%

215,153

108,006

99.2%

Pharmaceuticals and Cosmetics

74,847

51,503

45.3%

208,837

139,107

50.1%

Retail and Manufacturing

32,753

20,930

56.5%

99,807

55,140

81.0%

Education and Services

18,855

16,458

14.6%

55,508

40,096

38.4%

Logistic and Transportation

20,229

10,713

88.8%

54,861

20,868

162.9%

Others

58,604

17,609

232.8%

148,598

28,870

414.7%

Total

559,018

375,970

48.7%

1,575,905

987,586

59.6%

Net Revenue by geography

(in BRL thousand)

3Q22

3Q21

Var.

3Q22 x 3Q21

9M22

9M21

Var.

9M22 x 9M21

NAE (North America and Europe)

289,758

170,883

69.6%

798,751

487,811

63.7%

North America

232,697

165,015

41.0%

655,941

470,563

39.4%

Europe

57,061

5,868

872.4%

142,810

17,248

728.0%

LATAM (Latin America)

247,200

192,200

28.6%

724,480

465,900

55.5%

APJ (Asia, Pacific and Japan)

22,060

12,887

71.2%

52,674

33,875

55.5%

Reconciliation of various income statement amounts from IFRS to non-IFRS for the three and nine months ended September 30, 2022 and 2021:

Gross Profit

(in BRL thousand)

3Q22

3Q21

Var.

3Q22 x 3Q21

9M22

9M21

Var.

9M22 x 9M21

Net Revenue

559,018

 

375,970

 

48.7%

1,575,905

 

987,586

 

59.6%

Cost of Services

(363,617

)

(246,846

)

47.3%

(1,034,111

)

(640,986

)

61.3%

Gross Profit

195,401

 

129,124

 

51.3%

541,794

 

346,600

 

56.3%

Adjustments

 

 

 

 

 

 

Depreciation and amortization (cost of services provided)

10,688

 

10,345

 

3.3%

30,302

 

23,121

 

31.1%

Stock-based compensation

369

 

116

 

219.0%

1,190

 

348

 

241.7%

Adjusted Gross Profit

206,458

 

139,584

 

47.9%

573,285

 

370,069

 

54.9%

Adjusted Gross Profit Margin

36.9%

37.1%

-0.2p.p

36.4%

37.5%

-1.1p.p

SG&A and other expenses

(in BRL thousand)

3Q22

3Q21

Var.

3Q22 x 3Q21

9M22

9M21

Var.

9M22 x 9M21

Selling

(43,337

)

(24,122

)

79.7%

(118,428

)

(61,902

)

91.3%

General and administrative

(84,804

)

(38,966

)

117.6%

(228,115

)

(93,056

)

145.1%

SG&A expenses

(128,141

)

(63,088

)

103.1%

(346,543

)

(154,958

)

123.6%

Other income (expenses) net (1)

(3,008

)

(25,309

)

-88.1%

(7,492

)

(23,866

)

-68.6%

Impairment loss on trade receivables and contract assets

325

 

(1,662

)

-

(385

)

(2,030

)

-81.0%

SG&A and other operating expenses

(130,824

)

(90,059

)

45.3%

(354,420

)

(180,854

)

96.0%

(1)

Include research and technological innovation expenses

Adjusted EBITDA

(in BRL thousand)

3Q22

3Q21

Var.

3Q22 x 3Q21

9M22

9M21

Var.

9M22 x 9M21

Net profit for the period

40,608

 

(2,208

)

-

95,830

 

82,129

 

16.7%

Adjustments

 

 

 

 

 

 

Net financial cost

7,432

 

22,416

 

-66.8%

41,677

 

26,102

 

59.7%

Income tax expense

16,537

 

18,857

 

-12.3%

49,867

 

57,515

 

-13.3%

Depreciation and amortization

23,558

 

14,083

 

67.3%

67,154

 

30,102

 

123.1%

Stock-based compensation

761

 

193

 

294.6%

1,894

 

693

 

173.5%

Consulting expenses (1)

-

 

3,080

 

-100.0%

-

 

3,080

 

-100.0%

Government grants

(204

)

(4

)

n.m

(378

)

(1,418

)

-73.4%

Write-off and Impairment (2)

2,156

 

21,818

 

-90.1%

3,703

 

21,818

 

-83.0%

Acquisition-related expenses (3)

16,497

 

1,815

 

809.0%

34,051

 

2,277

 

n.m

Adjusted EBITDA

107,343

 

80,049

 

34.1%

293,799

 

222,297

 

32.2%

Adjusted EBITDA Margin

19.2%

21.3%

-2.1p.p

18.6%

22.5%

-3.9p.p

(1)

IPO-related expenses, including consulting and corporate reorganization expenses.

(2)

Non-cash expenses related to the write-off due to the inventory of property, plant, and equipment in the amount of (R$1,548) in 9M21, tax write-off of (R$2,156) in 3Q22, and impairment of intangible assets of Dextra, acquired in August 2021 in the amount of (R$21,818) in 3Q21.

(3)

Include fair value adjustment on accounts payable for business combination, consulting expenses and retention bonuses.

Net Profit

(in BRL thousand)

3Q22

3Q21

Var.

3Q22 x 3Q21

9M22

9M21

Var.

9M22 x 9M21

Net profit for the period

40,608

 

(2,208

)

-

95,830

 

82,129

 

16.7%

Adjustments

 

 

 

 

 

 

Consulting expenses

-

 

3,080

 

-100.0%

-

 

3,080

 

-100.0%

Write-off and Impairment (1)

2,156

 

21,818

 

-90.1%

3,703

 

21,818

 

-83.0%

Acquisition-related expenses (2)

26,743

 

4,389

 

509.3%

63,321

 

4,852

 

n.m

Adjusted Net Profit (3)

69,507

 

27,079

 

156.7%

162,854

 

111,878

 

45.6%

Adjusted Net Profit Margin

12.4%

7.2%

5.2p.p

10.3%

11.3%

-1p.p

(1)

Non-cash expenses related to the write-off due to the inventory of property, plant, and equipment in the amount of (R$1,548) in the 9M21, tax write-off of (R$2,156) in the 3Q22 and 9M22, and impairment of intangible assets of Dextra, acquired in August 2021 in the amount of (R$21,818) in the 3Q21 and 9M211.

(2)

Include amortization of intangible assets from acquired companies, fair value adjustment on accounts payable for business combination, consulting expenses and retention bonuses.

(3)

Adjustments' amounts are gross of tax. Tax effects on non-IFRS adjustments totaled (R$1,943) in 3Q22, (R$1,413) in 3Q21, (R$2,605) in 9M22, and (R$1,570) in 9M21.

 

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