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CI&T Reports 4Q23 and 2023 Results

Cash generated from operating activities rose 158% to R$414 million in 2023

CI&T (NYSE: CINT, “Company”), a global digital specialist and fast-growing technology company, today announces its results for the fourth quarter of 2023 (4Q23) and the full-year ended on December 31, 2023 (2023) in accordance with International Financial Reporting Standards (IFRS). The consolidated statement of profit or loss, financial position, and cash flow presented in this report already contemplate the restated numbers for 2022. Please refer to the announcement on March 7, 2023 for more details (Restatement of Previously Issued Financial Statements). The full audited financial statements for 2023 and 2022 will be filed in our Annual Report on Form 20-F for 2023.

Fourth Quarter of 2023 (4Q23) Operating and Financial Highlights

  • Net Revenue was R$ 522.6 million compared to R$ 611.8 million in 4Q22.
  • Net Profit was R$ 22.9 million, compared to a net profit of R$ 22.4 million in 4Q22.
  • Adjusted Net Profit was R$ 48.9 million, an increase of 13.2% compared to R$ 43.2 million in 4Q22.
  • Adjusted EBITDA was R$103.6 million compared to R$127.4 million in 4Q22. The Adjusted EBITDA margin was 19.8%.
  • CI&T ended 4Q23 with 6,111 employees, fairly stable compared to 3Q23.

Full-year ended on December 31, 2023 (2023) Operating and Financial Highlights

  • Net Revenue was R$2,233.5 million, an increase of 2.1% compared to R$2,187.7 million in 2022. Net Revenue growth at constant currency was 4.1%.
  • Net Profit increased 38.5% to R$132.6 million from R$95.7 million in 2022.
  • Adjusted Net Profit increased by 14.4% to R$193.9 million from R$169.5 million in 2022. The Adjusted Net Profit margin was 8.7%.
  • Adjusted EBITDA rose to R$432.1 million from R$417.5 million in 2022, 3.5% higher. The Adjusted EBITDA margin was 19.3%.
  • Cash generated from operating activities rose 157.9% in 2023 to R$414.3 million in 2023 from R$160.7 million in 2022.

Cesar Gon, founder and CEO of CI&T, commented, "CI&T has a notable track record of consistent revenue growth, profitability, and robust cash generation over the years, supporting our clients on the verge of new technologies. From 2019 to 2023, our revenue CAGR was 35%, of which 60% originated from mature economies nowadays, especially in the US. Notably, we've seen a significant improvement in diversifying our client base, with revenue from our top ten clients improving from 67% in 2020 to under 40% in 2023. Now, powered by the AI revolution, we're entering a new cycle of growth by driving innovation and delivering impactful results to our clients."

Comments on the 4Q23 financial performance

In 4Q23, net revenue was R$522.6 million, compared to R$611.8 million in 4Q22, a reduction of 14.6%. In 4Q23, the number of clients with revenues above R$10 million in the last twelve months increased to 50, from 38 in 4Q22.

In 4Q23, the Adjusted EBITDA was R$103.6 million, compared to R$127.4 million in 4Q22, an 18.7% reduction, primarily attributed to the decrease in the gross profit margin, partially mitigated by the reduction in SG&A expenses, as a result of lower personnel expenses in 2023. The Adjusted EBITDA margin was 19.8% in the quarter.

Income tax expense was R$13.8 million in 4Q23, compared to R$32.2 million in 4Q22. Income tax paid (cash impact) was R$1.9 million in 4Q23 and R$14.8 million in 4Q22. The income tax reduction from the amortization of goodwill for tax purposes was R$10.5 million in 4Q23 and R$10.1 million in 4Q22, reducing the income tax paid in cash.

Thus, in 4Q23, we reported a net profit of R$22.9 million, compared to a net profit of R$22.4 million in 4Q22. Adjusted Net Profit was R$48.9 million, an increase of 13.2% compared to R$43.2 million in 4Q22, mainly due to lower income tax and financial expenses. Consequently, the Adjusted Net Profit margin was 9.4%, an improvement of 2.3 percentage points year-over-year.

Comments on the 2023 financial performance

In 2023, net revenue was R$2,233.5 million, 2.1% higher than in 2022. Net Revenue growth at constant currency was 4.1%. The revenue distribution by geography was 44% from North America, 41% from Latam, 10% from Europe, and 5% from Asia Pacific.

In 2023, the Adjusted EBITDA was R$432.1 million, 3.5% higher than in 2022, mainly attributed to the successful implementation of our management's cost and expense optimization plan, evidenced by the reduction in SG&A expenses in 2023. The Adjusted EBITDA margin was 19.3% in the year, 0.2 percentage points higher than in 2022.

Income tax expense was R$76.7 million in 2023, compared to R$104.6 million in 2022, a reduction of 26.6%. Income tax paid (cash impact) was R$27.4 million in 2023 (cash tax rate of 13.1%) and R$48.3 million in 2022 (cash tax rate of 24.1%). The income tax reduction from the amortization of goodwill for tax purposes was R$41.4 million in 2023 and R$40.5 million in 2022, reducing the income tax paid in cash.

The net profit increased 38.5%, from R$95.7 million in 2022 to R$132.6 million in 2023. Adjusted Net Profit was R$193.9 million, 14.4% higher than in 2022, mainly due to lower SG&A expenses and income taxes paid. As a result, the Adjusted Net Profit margin was 8.7%.

Cash generated from operating activities was R$414.3 million in 2023, compared to R$160.7 million in 2022, an increase of 157.9%. Free cash flow (net cash from operating activities less Capex) was R$271.1 million in 2023. CI&T ended 2023 with a cash position of R$214.8 million, including financial investments. Total loans and borrowings (current and non-current) were R$727.5 million in 2023, compared to R$989.8 million in 2022, a reduction of R$262.3 million, due to the robust amount of cash generated in 2023.

Business Outlook

We expect our net revenue in the first quarter of 2024 to be at least R$520 million on a reported basis, assuming an average FX rate of 5.00 BRL/USD in 1Q24.

For the full year of 2024, we expect our net revenue growth at constant currency to be in the range of -2.5% to +2.5% year-over-year. In addition, we estimate our Adjusted EBITDA margin to be in the range of 17% to 19%.

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

About CI&T

CI&T (NYSE: CINT) is a global hyper-digital specialist, a partner in AI-powered digital transformation and efficiency for 100+ large enterprises and fast-growing clients. As digital natives, CI&T brings a 29-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 6,100+ professionals.

Basis of accounting and functional currency

CI&T maintains its books and records in Brazilian reais, which is the presentation currency of its audited consolidated financial statements, and the functional currency of our operations in Brazil. CI&T prepares its audited consolidated financial statements in accordance with IFRS, as issued by the IASB.

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. They 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’ 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 cannot reasonably predict the 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 measures, foreign currency exchange gains/losses, and other items. These items are uncertain, depend on various factors, and could have a material impact on our 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 rates from the prior period to show changes in our revenue without giving effect to period-to-period currency fluctuations.

In calculating Adjusted Gross Profit, we exclude cost components unrelated to the direct management of our services. For the periods presented, 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. We calculate Adjusted EBITDA for the periods presented as Net Profit, plus net finance costs, income tax expense, depreciation and amortization, plus: (i) stock-based compensation expenses; (ii) government grants related to tax reimbursement in our Chinese subsidiary; (iii) acquisition-related expenses, including the present value and fair value adjustment to accounts payable for business acquired, consulting expenses, and retention packages; and (iv) business restructuring expenses, associated with senior employees' separation from acquired companies.

In calculating Adjusted Net Profit, we exclude components unrelated to the direct management of our services. For the periods presented, the adjustments applied were acquisition-related expenses, including amortization of intangible assets from acquired companies, present value and fair value adjustments to accounts payable for business acquired, consulting expenses, retention packages, and the tax effects of non-IFRS adjustments.

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 that may be deemed forward-looking statements, 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 expectations or beliefs. 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 our expectations. 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 be materially different from those expressed or implied by such statements in this press release. Such risk factors include, but are not limited to, those relating to: the ongoing war in Ukraine and the economic sanctions imposed by Western economies on Russia, as well as the conflict between Israel and Hamas, and their impact on our business and industry; the impact of competition on our business; uncertainty regarding the demand for and market utilization of our services; our ability to maintain or acquire new client relationships; general business and economic conditions; our ability to successfully integrate the recent-acquired business; the impact of pandemics, epidemics and disease outbreak; and our ability to successfully implement our growth strategy and strategic plans. Additional information about these and other risks and uncertainties is 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 we may file from time to time with the SEC. Except as required by law, we assume no obligation to and do not intend to update these forward-looking statements or to update the reasons why actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Consolidated statement of profit or loss

(In thousands of Brazilian Reais)

 

 

Quarter ended December 31,

 

Full year ended December 31,

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

Restated

Net revenue

522,560

 

 

611,805

 

 

2,233,466

 

 

2,187,710

 

Costs of services provided

(348,906

)

 

(391,108

)

 

(1,487,742

)

 

(1,425,219

)

Gross profit

173,654

 

 

220,697

 

 

745,724

 

 

762,491

 

 

 

 

 

 

 

 

 

Selling expenses

(41,400

)

 

(45,443

)

 

(173,643

)

 

(163,871

)

General and administrative expenses

(82,531

)

 

(87,800

)

 

(290,499

)

 

(315,915

)

Impairment loss on trade receivables and contract assets

1,017

 

 

56

 

 

(1,556

)

 

(329

)

Other income (expenses) net

3,425

 

 

(966

)

 

5,450

 

 

(8,458

)

Operating expenses net

(119,489

)

 

(134,153

)

 

(460,248

)

 

(488,573

)

 

 

 

 

 

 

 

 

Operating profit before net finance costs and income tax expenses

54,165

 

 

86,544

 

 

285,476

 

 

273,918

 

 

 

 

 

 

 

 

 

Finance income

12,858

 

 

17,358

 

 

75,245

 

 

172,996

 

Finance cost

(30,296

)

 

(49,327

)

 

(151,426

)

 

(246,642

)

Net finance costs

(17,438

)

 

(31,969

)

 

(76,181

)

 

(73,646

)

 

 

 

 

 

 

 

 

Profit before income tax

36,727

 

 

54,575

 

 

209,295

 

 

200,272

 

 

 

 

 

 

 

 

 

Current income tax

(5,720

)

 

(22,682

)

 

(34,536

)

 

(59,570

)

Deferred income tax

(8,083

)

 

(9,540

)

 

(42,186

)

 

(44,992

)

Total income tax expense

(13,803

)

 

(32,221

)

 

(76,722

)

 

(104,562

)

 

 

 

 

 

 

 

 

Net profit for the year

22,924

 

 

22,354

 

 

132,573

 

 

95,710

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

Earnings per share – basic (in R$)

0.17

 

 

0.17

 

 

0.97

 

 

0.72

 

Earnings per share – diluted (in R$)

0.16

 

 

0.16

 

 

0.95

 

 

0.71

 

 

 

 

 

 

 

 

 

Weighted average number of basic shares

136,368,202

 

 

133,717,919

 

 

136,419,395

 

 

133,186,441

 

Weighted average number of diluted shares

139,097,276

 

 

141,203,853

 

 

139,148,469

 

 

134,774,674

 

Consolidated statement of financial position

(In thousands of Brazilian Reais)

 

Assets

December 31, 2023

 

December 31, 2022

 

Liabilities and equity

December 31, 2023

 

December 31, 2022

 

 

 

Restated

 

 

 

 

Restated

Cash and cash equivalents

211,638

 

185,727

 

Suppliers and other payables

21,690

 

 

33,376

 

Financial Investments

3,164

 

96,299

 

Loans and borrowings

112,719

 

 

236,030

 

Trade receivables

471,951

 

501,671

 

Lease liabilities

17,862

 

 

21,539

 

Contract assets

147,620

 

217,250

 

Salaries and welfare charges

196,396

 

 

260,156

 

Recoverable taxes

23,588

 

17,922

 

Accounts payable for business acquired

13,365

 

 

76,746

 

Tax assets

17,483

 

2,959

 

Derivatives

-

 

 

4,109

 

Derivatives

9,620

 

11,194

 

Tax liabilities

2,602

 

 

3,890

 

Other assets

27,072

 

38,269

 

Other taxes payable

15,275

 

 

14,382

 

Total current assets

912,136

 

1,071,291

 

Contract liability

48,079

 

 

32,136

 

 

 

 

 

 

Other liabilities

27,290

 

 

47,501

 

Recoverable taxes

959

 

3,624

 

Total current liabilities

455,278

 

 

729,865

 

Deferred tax assets

18,284

 

15,571

 

 

 

 

 

Judicial deposits

7,280

 

9,819

 

 

 

 

 

Restricted cash - Escrow account and indemnity asset

29,061

 

31,552

 

Loans and borrowings

614,744

 

 

753,733

 

Other assets

1,027

 

3,654

 

Deferred tax liabilities

68,465

 

 

20,942

 

Property, plant and equipment

38,584

 

55,266

 

Lease liabilities

27,037

 

 

41,269

 

Intangible assets and goodwill

1,669,865

 

1,755,994

 

Provisions

9,620

 

 

12,347

 

Right-of-use assets

39,695

 

56,187

 

Accounts payable for business acquired

122,689

 

 

133,299

 

Total non-current assets

1,804,755

 

1,931,667

 

Other liabilities

7,807

 

 

3,530

 

 

 

 

 

 

Total non-current liabilities

850,362

 

 

965,120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Share capital

37

 

 

37

 

 

 

 

 

 

Share premium

980,893

 

 

946,173

 

 

 

 

 

 

Capital reserves

174,153

 

 

203,218

 

 

 

 

 

 

Retained earnings reserves

354,240

 

 

221,667

 

 

 

 

 

 

Other comprehensive income (loss)

(98,072

)

 

(63,122

)

 

 

 

 

 

Total equity

1,411,251

 

 

1,307,973

 

 

 

 

 

 

 

 

 

 

Total assets

2,716,891

 

3,002,958

 

Total equity and liabilities

2,716,891

 

 

3,002,958

 

Consolidated statement of cash flows

(In thousands of Brazilian Reais)

 

December 31, 2023

 

December 31, 2022

 

 

 

Restated

Cash flows from operating activities

 

 

 

Net profit for the year

132,573

 

 

95,710

 

Adjustments for:

 

 

 

Depreciation and amortization

93,213

 

 

94,558

 

Loss on sale and write-off of fixed assets

1,689

 

 

3,781

 

Interest, monetary variation and exchange rate changes

86,793

 

 

57,156

 

Unrealized gain on financial instruments

(14,735

)

 

(7,114

)

Income tax expenses

76,722

 

 

104,562

 

Impairment losses on trade receivables and contract assets

1,556

 

 

329

 

(Reversal of) Provision for tax and labor risks

(424

)

 

386

 

Share-based plan

28,116

 

 

5,486

 

Restructuring expenses

18,327

 

 

-

 

Changes in fair value of accounts payable for business acquired

4,863

 

 

11,497

 

Others

(571

)

 

(1,855

)

Variation in operating assets and liabilities

 

 

 

Trade receivables

4,381

 

 

(116,574

)

Contract assets

63,327

 

 

(69,101

)

Recoverable taxes

(31,755

)

 

(547

)

Suppliers

(13,112

)

 

(29,769

)

Salaries and welfare charges

(61,538

)

 

10,729

 

Tax liabilities

1,720

 

 

(9,681

)

Contract liabilities

17,175

 

 

9,636

 

Other receivables and payables, net

5,976

 

 

1,467

 

Cash generated from operating activities

414,296

 

 

160,656

 

Income tax paid

(27,407

)

 

(48,299

)

Interest paid on loans and borrowings

(91,788

)

 

(70,096

)

Interest paid on lease

(4,057

)

 

(6,169

)

Income tax refund

4,198

 

 

-

 

Net cash from operating activities

295,242

 

 

36,092

 

Cash flows from investment activities:

 

 

 

Acquisition of property, plant and equipment and intangible assets

(24,109

)

 

(22,967

)

Redemption of financial investments

90,298

 

 

655,533

 

Acquisition of subsidiary net of cash acquired

-

 

 

(722,665

)

Escrow deposit

-

 

 

(23,061

)

Cash outflow on hedge accounting settlement

-

 

 

25,263

 

Hedge accounting - ineffective portion inflow

-

 

 

5,337

 

Net cash from (used in) investment activities

66,189

 

 

(82,560

)

Cash flows from financing activities:

 

 

 

Exercised share-based compensation

1,227

 

 

12,668

 

Payment of lease liabilities

(24,070

)

 

(26,993

)

Proceeds from loans and borrowings

205,093

 

 

527,507

 

Settlement of derivatives

12,200

 

 

390

 

Payment of loans and borrowings

(407,013

)

 

(350,571

)

Payment of installment related to accounts payable of business acquired

(77,338

)

 

(62,338

)

Repurchase of treasury shares

(43,414

)

 

-

 

Net cash from (used in) financing activities

(333,315

)

 

100,663

 

Net increase in cash and cash equivalents

28,116

 

 

54,195

 

Cash and cash equivalents as of January 1st

185,727

 

 

135,727

 

Exchange variation effect on cash and cash equivalents

(2,205

)

 

(4,195

)

Cash and cash equivalents as of December 31st

211,638

 

 

185,727

 

Net Revenue Distribution

 

Net Revenue by industry

(in BRL thousand)

4Q23

4Q22

Var.

4Q23 x 4Q22

2023

2022

Var.

2023 x 2022

Financial Services

154,657

172,916

-10.6%

647,063

652,089

-0.8%

Consumer Goods

104,875

122,755

-14.6%

448,587

473,871

-5.3%

Technology and Telecommunications

73,957

113,689

-34.9%

387,291

329,787

17.4%

Retail and Industrial Goods

66,206

80,380

-17.6%

274,557

307,995

-10.9%

Life Sciences

61,998

71,563

-13.4%

247,038

274,353

-10.0%

Others

60,868

50,502

20.5%

228,930

149,615

53.0%

Total

522,560

611,805

-14.6%

2,233,466

2,187,710

2.1%

Net Revenue by geography

(in BRL thousand)

4Q23

4Q22

Var.

4Q23 x 4Q22

2023

2022

Var.

2023 x 2022

North America

215,459

267,233

-19.4%

977,663

923,174

5.9%

Europe

57,053

63,182

-9.7%

224,698

205,992

9.1%

Latin America

226,396

251,466

-10.0%

924,874

975,948

-5.2%

Asia Pacific

23,651

29,923

-21.0%

106,231

82,596

28.6%

Total

522,560

611,805

-14.6%

2,233,466

2,187,710

2.1%

Top Clients

(in BRL thousand)

4Q23

4Q22

Var.

4Q23 x 4Q22

2023

2022

Var.

2023 x 2022

Top Client (1)

33,118

75,923

-56.4%

185,317

325,505

-43.1%

Top 10 Clients

199,329

273,122

-27.0%

887,282

1,079,941

-17.8%

(1)

The top client considered in 4Q23 may differ from that disclosed in the full year and should not be factored into the calculation of the end-year position.

Reconciliation of various income statement amounts from IFRS to non-IFRS measures for the three months ended December 31, 2023 and 2022 and full year ended December 31, 2023 and 2022:

 
Net Revenue

(in BRL thousand)

4Q23

4Q22

Var.

4Q23 x 4Q22

2023

2022

Var.

2023 x 2022

Net Revenue

522,560

611,805

-14.6%

2,233,466

2,187,710

2.1%

Net Revenue at Constant Currency

536,299

611,805

-12.3%

2,277,403

2,187,710

4.1%

Adjusted Gross Profit

(in BRL thousand)

4Q23

4Q22

Var.

4Q23 x 4Q22

2023

2022

Var.

2023 x 2022

Net Revenue

522,560

611,805

-14.6%

2,233,466

2,187,710

2.1%

Cost of Services

(348,906)

(391,108)

-10.8%

(1,487,742)

(1,425,219)

4.4%

Gross Profit

173,654

220,697

-21.3%

745,724

762,491

-2.2%

Adjustments

 

 

 

 

 

 

Depreciation and amortization (cost of services provided)

8,705

10,667

-18.4%

35,953

40,968

-12.2%

Stock-based compensation

3,481

3,045

14.3%

13,842

4,235

226.8%

Adjusted Gross Profit

185,839

234,409

-20.7%

795,518

807,694

-1.5%

Adjusted Gross Profit Margin

35.6%

38.3%

-2.8p.p

35.6%

36.9%

-1.3p.p

Adjusted EBITDA

(in BRL thousand)

4Q23

4Q22

Var.

4Q23 x 4Q22

2023

2022

Var.

2023 x 2022

Net profit for the year

22,924

22,354

2.5%

132,573

95,710

38.5%

Adjustments

 

 

 

 

 

 

Net financial cost

17,438

31,969

-45.5%

76,181

73,646

3.4%

Income tax expense

13,803

32,221

-57.2%

76,722

104,562

-26.6%

Depreciation and amortization

22,233

27,404

-18.9%

93,213

94,558

-1.4%

Stock-based compensation

6,376

3,592

77.5%

28,116

5,486

412.5%

Government grants

(624)

(764)

-18.3%

(931)

(1,141)

-18.5%

Acquisition-related expenses (1)

436

10,601

-95.9%

5,184

44,652

-88.4%

Business restructuring (2)

20,997

0

0.0%

20,997

0

0.0%

Adjusted EBITDA

103,582

127,377

-18.7%

432,056

417,473

3.5%

Adjusted EBITDA Margin

19.8%

20.8%

-1p.p

19.3%

19.1%

0.3p.p

(1)

Include present value and fair value adjustments on accounts payable for business acquired, consulting expenses, and retention packages.

(2)

Associated with senior employees' separation from acquired companies.

Adjusted Net Profit

(in BRL thousand)

4Q23

4Q22

Var.

4Q23 x 4Q22

2023

2022

Var.

2023 x 2022

Net profit for the year

22,924

22,354

2.5%

132,573

95,710

38.5%

Adjustments

 

 

 

 

 

 

Acquisition-related expenses (1)

11,231

24,400

-54.0%

50,717

87,721

-42.2%

Business restructuring (2)

20,997

0

0.0%

20,997

0

0.0%

Tax effects on non-IFRS adjustments (3)

(6,226)

(3,546)

75.6%

(10,341)

(13,970)

-26.0%

Adjusted Net Profit

48,925

43,208

13.2%

193,946

169,460

14.4%

Adjusted Net Profit Margin

9.4%

7.1%

2.3p.p

8.7%

7.7%

0.9p.p

(1)

Includes amortization of intangible assets from acquired companies totaled (R$10,795) thousand in 4Q23, (R$13,799) thousand in 4Q22, (R$45,533) thousand in 2023 and (R$43,069) thousand in 2022, present value and fair value adjustment on accounts payable for business acquired, consulting expenses and retention packages.

(2)

Associated with senior employees' separation from acquired companies..

(3)

As of the 4Q23, we are contemplating the tax effects on non-IFRS adjustments as part of the Adjusted Net Profit calculation. Thus, comparison with previously reported numbers will differ.

 

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