There is a distance every company is trying to close right now. It shows up on no roadmap and no balance sheet. But it's there, sitting between the AI model and the result. Most companies see a gap. We see the space between. An open sea. Something you don't just cross, you navigate it, you build in it. And like any sea, it can be charted. Charting it takes more than a bold move. It takes the right conditions, working as one system. That's CINTAI deployment. It is how the space between gets crossed. And crossing it again and again is how organizations navigate change.

Good afternoon, and thank you for joining us for CINTAI second quarter of 2026 earnings call. I am Eduardo Galvão, Director of Investor Relations. Joining me today to discuss our quarterly results are Cesar Ghosn, our Founder and CEO, Bruno Guicardi, Founder and President for North America and Europe, and Stanley Rodrigues, our CFO. Before we begin, I would like to remind you that our remarks today will include forward-looking statements. These statements, including our business outlook, are based on the management current expectations and are subject to risks and uncertainties that could cause actual results to the firm materially. We caution you not to place undue reliance on these forward-looking statements, as they are valid only as of the date when made. Additionally, we'll discuss certain non-GAAP financial measures. We believe this provides a more comprehensive view of our underlining operational performance. For a full reconciliation of these measures to the most directly comparable gap metrics, please refer to the tables in our earnings release. Today's session is being recorded and all participants are currently in a listen-only mode. Following our presentation, we'll host a Q&A session. To participate, please submit your question via email to investors at cint.com. The full presentation deck is available on our Investor Relations website, and a replay of this call will be posted shortly after we conclude. With that, I am pleased to hand the floor over to our founder and CEO, Cesar Ghosn.

Thank you, Eduardo, and good afternoon, everyone. Global AI spend is projected to hit $2.6 trillion this year, up 47% year-over-year. And yet, according to MIT, roughly 95% of AI initiatives still show no measurable business return. That gap is where I want to begin today. We published two papers this quarter that get a why. The force argues that most companies are optimizing the wrong variable, chasing incremental task efficiency instead of asking where AI can return 10 times rather than 10%. The second paper calls it organizational hallucination. The confident believe that a company is transforming when it's actually just experimenting. In both cases, the constraint was never the technology. It's the organization's capacity to absorb it. That gap is exactly where CINT plays. And it's why we build our business around two things. AI deployment, installing real capability inside a client's core, and AI monetization, capturing, together with our clients, the productivity gains and business impact that AI deployment creates through value-based commercial models rather than headcount. Everything you will hear from us today, the robust and sustaining revenue growth and the increase in our sales investments to foster momentum, giving the AI opportunity, is the same thesis playing out inside our own business. These quarter's numbers reflect that opportunity And the deliberate choices we've made to capture it We delivered record revenue of $142.8 million Up 21.9% organically and above our guidance Broad-based across geographies, industry verticals and client cohorts Growth was increasingly fueled by new clients' wins and by initial engagements, scaling into large partnerships. Our new commercial models are also letting us capture a greater share of the value we create. That shows up directly in Adjusted Gross Margin, which expanded from 30.6% in the first quarter to 32.4% as this model scale. In the first six months of 2026, 30% of new engagements were under new value-based pricing models. And we project this gross margin expansion to accelerate in the coming quarters. Our adjusted EBITDA margin in the quarter was 13.3%, reflecting our deliberate choice. 2026 is a transition year, one where we invest in our commercial engine to turn this AI deployment opportunity into durable, profitable growth in 2027 and beyond. As a result, our commercial pipeline is now 40% larger than in the first half of 2025. In short, our top line shows the demand is solid. Our gross margin shows monetization is working, and this year's commercial investment is what let us compound that advantage going forward. And here we go again. The second quarter of 2026 marks our seventh consecutive quarter of double-digit organic growth. At a time when parts of our industry are consolidating through acquisitions, buying growth rather than building it, we've extended this streak without a single M&A deal, prioritizing our capital allocation toward our own transformation and our sales effort and growth engines. This embodies one of our cultural tenets. We play the infinite game. We are not optimizing for a single quarter. We are building a company designed to keep compounding for decades. This consistency reflects a structural shift in client demand and CIT's ability to capture it. The case studies that follow show how this AI deployment momentum is translating into tangible business outcomes.

MRV, Latin America's largest home builder. Now it's rebuilt how it speaks to the world. Five brands, one voice. CINT with Adobe laid the foundation for a new digital experience, then handed over the keys. The marketing team runs it alone now. No scaffolding, no outside help left on site. Three months in, the traffic tripled. 117% more people at the door. MRV brought the ground. CINT brought the blueprint. The windows opened on their own.

Let me show you some facts. A leader in market share in a country the size of a continent. A presence in over 350,000 retail points. More than 150 million pairs out there, in motion. At Paragatas, home of Havaianas and Rothes. A full day at our HQ in Campinas, Brazil, mapping the digital terrain together. From AI-powered commerce to the journeys that turn products into seamless experiences. Some journeys are better walked with the right partner, Arparagatas and CINT.

I think brands that are going to be successful in this new age are brands that have solid foundations, whether it's data foundations, awareness of customer behavior, because it's not necessarily about speed to market, but how fast you can learn and pivot and build experiences that really matter and resonate for the customer.

The agentic enterprise isn't coming. It's here. And it just got a bold ally. CINT just joined Anthropics' Claude Partner Network. Our engineers now certified in Claude, Claude code wired into CINT flow. 30 years across the globe, now setting the standard for how the world's largest enterprises deploy AI. Options generated, outcomes decided. This is the power of a partnership of a global AI deployment partner, boosted by Anthropic. We got your back!

A quick recap of our quarter. First, we launched Organization Hallucination, a new pocketbook by the CINT team, with chapters from Sezergon and Silvio Mera on why companies invest in AI and keep solving the wrong problems. Then came the wrong math of AI, a paper from the CINT team, our CFO Stanley Rodriguez, and co-founder Bruno Guicardi. Its bottom line? AI won't transform your organization. You will. Business Complexity Points, BCP, went open source. Ten years of work with Itau, one of Latin America's largest banks, now free for everyone on GitHub. The Retail Tech Report, Agentic Edition, landed next, led by Melissa Minkow, our Global Director of Retail Strategy, on how Agentic AI is already reshaping retail. We were around the clock at the biggest stages in AI and innovation this quarter. We introduced the ESG Consumer Index 2026, A sharp read on what people now expect brands to prove. And one milestone stands out. We're the first software company in Latin America with SBTI-validated net-zero targets. Climate action measured by science, not marketing. Beyond that, a partnership with Mistral, a pioneer in open-weight AI, to power the next generation of agentic enterprises. That's our quarter. Explore more at our website.

These case studies demonstrate how our organic STLC and CINT flow are resetting the baseline for enterprise productivity and speed to value. I will now hand over to Bruno to discuss how we are scaling this hyper productivity through our global delivery model and our evolved talent strategy.

Thank you Cesar. Good afternoon everyone. I'm glad to share our operational and talent progress for this quarter. We closed Q2 2026 with roughly 8.1 thousand professionals, with voluntary attrition at 10.1%. Continue to trend towards some of the healthiest levels in our history. At the center of this workforce are our 6.7 thousand AI builders, the result of re-skilling 100% of our professionals to work AI natively. That matters right now. Recent independent research mapped a widening gap in the market for AI deployment talent, with demand for engineers who deploy AI at enterprise scale growing roughly 50% year-over-year. Most of our industry is racing to hire into an increasingly scarce pool of talent. We didn't have to. We built it from within, ahead of the market. Revenue per AI builder continues to grow, reaching over $80,000 in Q2 2026 on a last 12-month basis, an increase of 7% year-over-year. This is a direct result of AI monetization and value-based pricing, providing operating leverage and contributing to the expansion of our gross margin. Our momentum is being reinforced by a strategic partnership we announced this quarter, one that speaks directly to the role C&T plays for large enterprises. We joined Anthropic Code Partner Network, certifying more than a thousand AI engineers on code and working with Anthropic to help set a new standard for how AI gets deployed inside the world's largest organizations. CINT already runs cloud code extensively inside CINT flow, and this partnership expands that work into a joint gold market motion with a focus on co-developing industry solutions for financial services, retail, consumer goods, among other verticals. It is designed to open new enterprise accounts and expand our pipeline into verticals we co-developing, directly feeding our commercial momentum. Large enterprises need a partner who can take frontier models into complex regulated, mission-critical environments and deliver production-grade outcomes. That deployment layer is exactly where CINT operates, and this partnership makes us the connective tissue between the leading model providers and the world's largest organizations. That embedded engineering capability is exactly what enables us to play where the real value is shifting in the AI era, and this chart from Forrester is the clearest way we found to show clients why. Most of what's been sold as enterprise AI so far sits on the left side of this chart, automating individual tasks with co-pilots and agents, augmenting existing workflows end-to-end. It's a productivity story, efficiency gains on the top of an operating model that stays the same. The disruption is what Forster calls the process chasm. Cross it and the business case changes entirely, from efficiency to new revenue and margin structures, and ultimately to growth, relevance and the long-term perpetuity of the business itself. CIT built two offerings, specifically for the two quadrants on the right side of that chasm. The one I want to walk you through now, the one gaining the fastest traction with our clients today is Agentec Enterprise Reinvention. Agentec Enterprise Reinvention is how we help established enterprises redesign the core of their operations, moving from legacy ways of working to Agentec Native operations. We don't stop at advisory or isolated use cases. We install real operational capacity inside existing value streams and we stay until it runs on its own. In practice, that means bringing 60-80% of a core end-to-end process onto an agentic journey in months. Three things differentiate this from traditional systems integration. Who delivers it? Small senior forward deployment engineering teams. How we find the value? Three decades of lean-based process transformation along with our industry expertise give us the insight into where reinvention pays off and how we get paid increasingly outcome-based with fees tied to business results not to hours built and it compounds once we reinvent one core process it becomes the reference architecture for the rest of the enterprise giving every account a natural land and expand path that That means revenue that scales with the impact we create for clients, not with Hapcom. Now I will hand it over to Stanley to comment on our financial performance.

Thank you Bruno and good afternoon everyone. Let me walk you through our financial results for the second quarter of 2026. As Cesar mentioned, we delivered record net revenue of $142.8 million, up 21.9% year-over-year, entirely organic, and 14.1% at constant currency, above our guidance of at least $140 million. This performance reflects the strength of our go-to-market execution. Through the quarter, we saw our sales pipeline expand and our conversion rates improve, the direct payoff of deliberate commercial initiatives and the tangible results of our AI deployment delivers for our clients. Beyond the headline number, what matters is how evenly this growth is spread across our footprint. This slide shows the composition of our growth and the message is clear. Our momentum is not carried by any single vertical or client. Every region contributed. Latin America was the largest engine, expanding 32.1% year-over-year. New markets grew 26.3% and North America added a consistent 10.2% on a large mature base. Financial services, our largest vertical, continued to grow strongly, up 36% year-over-year. Technology and telecommunications accelerated to 68% growth, a robust turnaround from the contraction we saw just a year ago. Others grew 25%, life science 16% and retail and industrial goods 11%. The one exception is consumer goods where demand has been softer, a headwind with view as temporary. The composition by client cohort tells an equally healthy story. Clients outside our top 10 grew 24.1%, outpacing the 19% growth of our top 10, reinforcing that our momentum is not dependent on any single account. Taken together, this confirms that our AI deployment is a global catalyst, driving deeper penetration across every region and every client tier we serve. As you may recall from our last quarter's call, we said that our new engagement models gained traction, they would begin to expand our gross margin, and that is exactly what we are seeing. This quarter, our adjusted gross margin expanded sequentially from 30.6% in the first quarter to 32.4%, an increase of 1.8 percentage points as those models lift the value we capture per engagement. That said, on a year-over-year basis, This adjusted gross margin declined, driven by a foreign exchange headwind, as our productivity gains offset the impact of the payroll tax resumption. Looking ahead, we expect gross margin to continue improving over the coming quarters as adoption of these models broadens across our book of business, a core driver of the profitability expansion we are working toward. Adjusted EBITDA was 19 million with a 13.3% adjusted EBITDA margin. The year-over-year compression reflects two main factors. The first is the appreciation of the Brazilian real against the US dollar, which we have flagged before. On an FX neutral basis, adjusted EBITDA would have been $20.8 million, a 15.6% margin, giving a clearer view of our underlying performance. The second factor is deliberate, and it reflects two distinct components related to our sales efforts. Paravit is a targeted investment specific to 2026, including scaling our iGentec SDLC initiative to capture the current acceleration in demand for AI deployment. This is not a permanent addition to our cost base. The other part is structural, an expansion of our commercial organization to support new offerings practices and vertical initiatives as well as commission expenses which will remain part of how we go to market going forward together these investments are funding the 40 pipeline expansion year over year as caesar mentioned and higher conversion rate already showing up in our top line. This is a conscious trade-off between near-term margin and durable, higher-quality growth. Importantly, the underlying trend is encouraging. Our adjusted gross margin expanded sequentially, showing that the pressure at the EBITDA level comes from our deliberate investments and external headwinds, not from our core delivery economics, which are in fact improving. Looking ahead, we expect our adjusted EBITDA margin to improve sequentially, while these investments position us to fuel growth into 2027 and beyond. Moving to our bottom line, adjusted profit was 8.7 million in the second quarter with a 6.1% margin. This reflects the same two main factors I just described on EBITDA. The appreciation of the Brazilian Real and our deliberate investment in growth. Adjusted diluted earnings per share was 7 cents versus 9 cents in the prior year. We see this as an investment cycle, not a new baseline. As these investments continue to fuel our growth into 2027 and beyond, we expect profitability to recover and our capital discipline to keep amplifying returns for shareholders. This quarter, debt discipline included repurchasing 2.8 million in shares, continuing our ongoing buyback program even as we invest in growth. Combined with these repurchases, our weighted average diluted share count is down 3.6% year-over-year, meaning each remaining share now carries a larger claim on our future earnings. I will now turn the call back to Cesar to discuss our business outlook and the strategic path forward for the remainder of 2026.

Thanks Stanley. We continue to see an improving demand environment as enterprises increase their spending on AI deployment. and we are pleased with the evolution of our AI monetization efforts through new value-based commercial models. For the third quarter of 2026, we expect revenue of at least $145.7 million, a 14.4% increase over the third quarter of 2025, or 12.3% at constant currency. For the full year, we are raising our revenue guidance to the range of $566 million to $578 million, implying organic growth of 15.5% to 18%. Our revised outlook includes a positive FX impact of approximately 400 basis points. Alongside that, we now expect a just EBITDA margin for the year in the range of 15 to 17 percent, reflecting deliberate investment in the commercial engine that drives demand and accelerates monetization, with sequential margin improvements through the second half as planned. This is a forward-leaning choice to move first on AI deployment and expand our wallet share. And to be clear, this doesn't trade away financial discipline. Profitable cashier neurodive growth is still the bar we hold ourselves to. What we are building is a company that scales revenue with less headcount and grows more profitable as the new commercial models mature. With that, we are ready to begin the Q&A session. Thank you.

We'll now begin the Q&A session. I'll announce each participant's name. Once you hear your name, please unmute your line and ask your question. Then, when you're done, please mute your line. The first question comes from Pune Jane from J.P. Morgan. Hi, Pune.

Hey, thanks for taking my question. I want to follow up on margin guidance, like the cut of around 200 basis points. Like, I understand, like, a lot of it's discretionary investments and then currency. Can you break down, like, that impact for us? Like, how much of the incremental impact is FX versus investments? And why should we expect, like, the level of investments to go down? Like, we're still in very early stages of AI, build-out AI, ramp-up. Like, why won't, like, this level of investment stay where it is into next year and beyond?

I may start here. Puneet, thanks for the question. Puneet, let's take the full picture here. If you see seven quarters of double-digit growth growing four times faster than our peers, we are gaining market share, we're gaining wallet share, which means we're deepening relationship with our clients. We have this broad-based, you see growth in the top 10 clients, outside the top 10 clients, you see growth in all the regions, you see growth in most of the segments except by one, and everything is pure organic. We have a pipeline growing 40%. So everything is funded by this investment that we've been making ahead of the pack. And specifically in this second quarter, it's an answer to this surge in demand for AI deployment. then we reshape, redesign our go-to-market and that's what you see in the second quarter. Going forward, we see part of this investment we are reducing along throughout the quarters which is specifically the SDLC, agentic SDLC deployment But the other half, I would say, we will continue to see there. So it's more structural. So if you see from last year's quarter sales, it's 8% of net revenue. And this quarter, we are talking about 12%. So going forward, we will be pretty much in between. And this will be more than compensated by what you see in the gross margin, as this will continue to improve and also we will have operating leverage on top of SG&A as a whole, sales as well, and as a consequence, that's why you see EBITDA growing. and everything already counting on this deep pressure or from the effects and everything's compounding there.

Got it, no that's helpful and then like on your top line like it seems like the financial services vertical is doing really well like including the top line that's up nicely sequentially in this quarter so how broad-based like that growth in financial services is uh and and your expectations for the rest of the year there for that vertical sure i can get this one uh you're right the financial server was the second uh fastest uh vertical for us uh we grew 36 percent year every year in financial services, but we were across the board, retail 11%, tech and telco

68%, life sciences 16%, so we see only, by the way, only consumer goods minus 9%, so So it's a solid growth around all the, not only verticals, but if you see, look at our top 10 clients, even if you exclude our top one client, it's still a very high growth, 16% year over year among the top 10, excluding the top one that grew solid. So, basically, we will continue to see, we are forecasting expansion across the board in all the verticals in the top 10 clients and also the whole cohort of clients. I think what is behind is a solid increase in AI deployment demand and also the fact that I think we did all the investments to capture this momentum, as Stan mentioned, in our sales organization. So we expand verticals reach across the board to really speed up growth and increase the wallet share in our portfolio and also increase the land in new clients. So this is, I think, the second time we are raising our revenue guidance, and we continue to see a growing demand, and it's basically across the board. Of course, financial service will continue to be our number one vertical I think it's the use case for efficiency and customer experience in the financial service Especially in the banking sector has become very clear now in terms of impact But we see also other verticals evolving like retail with agent commerce will be a big trend and it's a red starting. Every single industry will have a set of very powerful use case to explore. So we are preparing our offerings and teams to capture that.

And just to add to that, financial service grew 36% year-over-year, while our top client grew 27%, so if you exclude the top client within that vertical, the other clients grew faster than that, so even higher than the 36% we see here.

You got it, yeah. Yeah, I was looking at your sequential growth basis, and it was up nicely at the top client, as well as the rest of the financial services, even on sequential growth. But I understand, so appreciate it.

Thanks, Pune. Thank you, Pune. Our next question comes from Stephen from WebBush. Stephen, please go ahead.

All right, thanks, guys. Thanks for taking the question. I want to start on the agentic SDLC that you guys pointed out in the quarter. I want to ask specifically about the pipeline that you're seeing there, because you mentioned that you saw 40% year-over-year growth in the pipeline, but what percentage of that was specifically tied to agentic SDLC? And does this carry any higher average deal sizes? And can you talk a little bit about the metrics there?

Sure. I can start, Bruno. You can jump in. Well, I think roughly 35%, 40% of our demand, and demand, we articulate as a Gentica STLC, especially transforming the current engagements we already have. So old traditional digital engagements now being reshaped as a Gentica STLC engagements with different commercial models and different margin profile too. So this is one specific offering where we are very, very competitive. I think we are five to ten times ahead of our typical competitors. So we have a lot of space for replacing underperforming competitors. And I think the gap is increasing. We have been investing with CINT flow and all the reskilling of our teams a lot in the last three years. And I see the gap of performance versus our competitors increasing. That gives us a lot of room for replacing them on our clients and also land on new avenues of growth. So, and the second question we're, sorry.

Specifically on the deal sizes for agent to guest DLC versus your traditional deal sizes.

Yeah, we are seeing an increase in the deal size. We are not sure if it's a trend or just momentum but we see in the last two quarters the size of the deals are larger but we are not sure yet if it's just a transition from the previous procurement model or if it's a long term tenants we disclosed the number we are 40% we have a 40% larger pipeline versus the same period last year and with a very solid conversion rate. So, and the deals are larger now, but not sure yet if it's a tendance. Depends on how the market wheel evolves.

Okay, got it. And if I can ask a quick follow-up, because I want to ask about the geographic split moving forward, because Latin America, it was another solid quarter of growth at 32%. If you look at North America, though, it was a 600 basis point deceleration from 1Q26 where last quarter was 16% and this quarter was 10%. Is there anything to point out there from a demand perspective? Is there any sort of competitive displacement happening there? Anything that you would want to point out specifically within North America?

I think this one, no, just seasonality, Stephen. I think we can expect that to be accelerating again throughout the year. So I think it was just Q2, seasonality, you know, some gaps in contract renewals and other kind of situations that were kind of ad hoc, nothing systematic.

All right, I appreciate the time.

I'll hop back into Q. Thank you, Steve. Our next question comes from Brian Perrigan from TD Callen. Brian. Hi, Brian. Please go ahead.

Hi, guys. I wanted to ask on tech and telecoms, so really strong growth number there in the quarter, the second consecutive really strong growth number. So I guess first, is this being driven by a handful of large transformation when you're seeing broader demand there in the client base? Maybe just give us more detail on what's driving that, because there's been some peers that have had more challenging results in that vertical, and how should we think about that going forward as we go through the second half.

Sure, sure. Thanks, Brian. Great to see you here. First is Telco. I think we have some big Telcos as clients, and we are getting a lot of traction with them, especially around Agentsk STLC. And, again, it resonates with, I think, the level of differentiation we are being able to showcase in terms of productivity. The second is a new trend that is because we combined tech and telco, but it was majority telco historically. CIT was not a we don't have really a lot of demand from the techie companies, but it's happening now. I think it's also correlated with the AI deployment demand, and so now we have some big tech companies increase their spending with us, it's also correlated with the partnerships we are announcing, probably you saw not only the typical hyperscalers, Amazon, Google, Microsoft, but also the new big players, especially and tropics, so it's a new revenue source for us and we are forcing, you're very happy to see this also adding to our growth.

Okay, understood. And then just a follow up on the margin recovery path, so to achieve that full year EBITDA margin target, it looks like you'd have to meaningfully improve from just over 14% in the first half. So can you just categorize kind of what are the biggest drivers of that improvement as you go through the second half? How much is coming from commercial model benefits versus moderating investment spend versus potentially moderating FX headwind?

Well, Brian, thank you for the question. I may start here and Bruno, if you may add. And again, if you see, Brian, as a comparison, for example, we have a 2.2, more or less, percentage point effect from the effects if you compare to second quarter 25. So, pretty much we are in line there and that includes our efficiency gains that compensates the tax resumption in the payroll in Brazil. So, you see there efficiency gains rolling, right? Going forward, what we have, we continue to see more and more conversion of the new models that they have higher margins playing at the gross margin level. So at the gross margin level, you will see improvement sequentially. Going down to the P&L, we will see a leverage, operating leverage on top of the SG&A and in sales specifically. As we don't have in the coming quarters the SGLC investment component that we saw heavier in the second quarter, order, you will see an alleviation there. Of course, we do have a structural sales part that will remain there, but again, the combination of better gross margins and the leverage, the operating leverage, will bring the EBITDA sequential improvement that it's implied in the guidance that we provided. Bruno, if you could add more colors there?

I'll just say that the seasonality of the sales investment that was done in Q2, that will stop and kind of halfway, so from the 8 to 12 percentage points on the revenue. right so it was if you look at the where we were last quarter it's eight percent now we're 12 like so we think we're going to kind of a long term will be around 10 so that that's another two percent probably not in q3 but certainly for the long run right so but but that kind of peak uh was kind of received a little bit okay i understand thank you thank you brian uh our next question

comes from Maria Clara from Itaú. Hi, Clara. Please go ahead.

Hi, everyone. So thanks for the opportunity. I have two questions here. So the first one more related on more color on the increasing pipeline. So can you please comment which industries have been outperforming? If you already see a trend of new clients gaining more traction, and also if you could please comment about the evolution of the new monetization formats within those new potential deals. And the second question is a follow-up about the gross margin expansion. Stanley just mentioned that those new monetization formats are already helping the gross margin expansion. So can you please elaborate more on that? What is the profitability boost here coming from those models and the profitability expansion potential in the long run?

Sure. let me start with your second question we basically are introducing four new price-based models that are so fixed price with higher margin output base that we it's a kind of throughput model price per consumption and then outcome base this is and this model will depends on the way we we combine are giving us 3% to 15% of points higher than the traditional Thai mature, so it depends on the mix, we have something in this range. So it is a very significant improvement in our contribution margin, and as I mentioned, 4% of everything we sold this year was a red, based on this new model, and as we execute with this contract, that's why we are foreseeing this expansion in gross margin. And our efforts are showing that this trend or increasing the new commercial models in our engagements will continue. So this is what we are working on, and we believe that this is a better way to play the AI deployment game and really align the purpose of the engagements with our clients. And we are seeing a lot of good reception from our clients. So this is, I think I gave you a range on what we are expecting as an improvement, an incremental improvement in our gross margin ahead. And the second is regarding how we see the demand and the pipeline expansion. We are putting everything under this AI deployment umbrella. That is, basically, we can group this demand in three set of offerings. The first is adoption, AI adoption is a big trend, particularly when we see opportunities around the software engineering and the GenCast TLC, as we mentioned, a lot of productivity gains to be captured, and speed to value to be captured, just reinventing the ways of work in the digital software space. The second is our IP-based solutions, that is things like our modernization studio, where we can streamline the conversion of a legacy system into modern AI-based architecture. The same for data. Data is a huge demand for us regarding preparing our clients for the IH, reducing the fragmentation and creating the right infrastructure around data. And then you have the specific use case by industry, efficiency or customer experience. I mentioned before some for financial services, there is retail. And for every single industry, we now see a set of powerful use case to explore. And finally, I think what is new, probably what I mentioned is 85, 90% of this increased demand. And we have a new trend in our pipeline that Bruno mentioned during the call. We launched the enterprise reinvention services. It's a new line of services, very transformative, where we help our clients not just improve current workflows, but really reinvent core process around AI. And this is always an outcome-based engagement. So this is a new trend, and probably we will see this being more relevant in the future in our pipeline. So basically, AI deployment in these three groups.

If I may add, I think we're very excited with the consumer experience element there that Cesar mentioned, because if you're hearing those calls for the last two years, we've been telling a lot that this will come, right? So the first phase of AI demand was solely focused on efficiencies and operational excellence, right so only internal where the user of AI was only our clients employees right and now we're seeing the first kind of a big scale programs geared towards consumers and customers of our clients which is very exciting for us because this is a completely new type of demand a demand that we predict that will be exponential as clients build more confidence into the models and the results that they're getting. This is a new kind of tsunami of demand that will come and will come for the ones that are in a better position, and I think we are. We are the ones that are actually being very successful with those initial work streams with the internal, you know, the implementations and kind of position ourselves very well to actually take on this new one that's coming out, upcoming and with a lot of potential for growth.

So just a very quick follow-up on that, Bruno. Do you foresee any sign of potential acceleration from this next step of AI revenues, potentially in 2027?

I think this area of consumer experience has a lot of potential for exponential growth. And again, as clients get more confident about the results and exposing those experiences and embedding agentic into the consumer experience, that has a lot of potential for growth.

Thank you. Very clear.

Thanks, Clara. Our next question comes from Gustavo Fabias from UBS. Hi, Gustavo.

Hi, you're welcome. Thanks for the opportunity. So, two questions. First one, on the AI deployment demand, I'd like to unpack it. If you could share color on how much of it is AI deployment per se versus the legacy modernization required for this AI deployment? and how much of the guidance raised was supported by those new partnerships with Entropic and Mistral that you announced recently. My second question, just to follow up on the margin outlook, first of all, I wanted to confirm if these investments in Agentic SDLC are mostly concentrated in the second quarter. And, most of all, how do you think of this structural expansion in the commercial department, commercial effort, if it's a multi-year effort or if we could expect normalization to happen next year? Thank you.

Thanks, Gustavo. start with the first one it's roughly 30% we put legacy modernization data modernization inside the AI deployment umbrella because these are foundational investments companies large companies need to do if they want to fully explore the potential the reinvention potential of AI so 30% has stored this legacy data and system modernization. The second, I think Stanley mentioned, we are expanding from 8% percentage of revenue over sales effort to 12% along this year. But for next year, we plan to stabilize around 10%. I think this will be more than offset by the new gross margin. we are already seeing in our engagements based on the new offerings and commercial models. And I think it's a sustainable long-term invest to keep accelerating our growth and increase our wallet and market share. So roughly, we went from 8 to 12, and half is a transition of current SDLC engagements. to AI genetic model and new commercial models and we we but part of this is a bigger a more strong global reach new vertical geographies and and capabilities we are introducing in our sales and so we we we will use our better gross margin and the dilution of our gna as part of the of the of scaling CINT in a very profitable way. In the end, I think why we are very excited is we are building a company that really can scale revenue faster than headcount and also can grow more profitable as our new commercial models mature and it's clear now that it's going to happen. So we are very excited with this new, this improvement in our typical pre-AI business model.

Very clear. Thank you, Cesar.

Thanks, Gustavo.

Thanks, Gustavo. Our next question comes from Luke Morrison from Canaccord. Hey, Luke, please go ahead.

Hey, guys. Good to see you. Nice job with the quarter. I got a couple questions here. The first, I guess on just consumption pricing and the new pricing model you guys are rolling out, the agent computing unit model, just as I think about sort of the underlying cost of running these models keeps falling, token costs are falling. If you're billing on consumption and the unit cost drops every year of that pricing model, How do you stop that from becoming a deflationary force and a deflationary revenue line over time?

Look, it's not a simple question. All these curves are moving, right? The cost per token is drastically reducing. But as the capabilities of the model increase, we are using more tokens. And so, but now we have the advent of different options regarding open weight models, like we are now investing a lot of on the Mistral partnership. So we have different alternatives, depends on the scenario. But in the end, our price per consumption model is important as an alternative for our clients. But we don't see this being the majority of our commercial model. It will be relevant, but also always combined with other models. We are not betting everything on a SaaS ACU model. We just want to have a portfolio of models and then combine by engagement, by client, in the most proper way. But this is a long and complex game on adjusting pricing and cost structure around this thing. Luckily, it's just a small part of our bets.

Yeah, fair enough. Makes sense. And then maybe just dovetailing, you mentioned Mistral there. You've partnered with multiple frontier model providers on different terms at this stage. you know obviously I think that Mistral Alliance is attractive to different types of clients and different geos but just how should I think about staying model agnostic versus going deep with one and to what extent do your clients care what's sitting underneath your platform form in Underflow Bruno want to try I can take this one they care look because they're sensitive terms on privacy

and data controls, right? So they care. But Flow is an agnostic platform, right? So Flow at this point is connected to more than 37 models and can kind of control that complexity for clients, right? But for us, we have to be agnostic and multi-model because we have clients and we have more than you know 200 clients in different geographies and different um the sectors we were you know the the provide the the main providers there have different types of footprint right so uh we have to work with our clients and what what's best for them and and kind of help them through throughout that complexity in the in respecting their their requirements for compliance and security right so that's so that's the positioning that we are in and kind of helping even with the fin ops that kind of implies right so like what are the models that are best for for certain tasks right so that's a knowledge that we build over the you know almost four years with flow and kind of automating many different type of work streams that's what we're helping our clients with and I think that's what driving a lot of those conversations and the deal flow that we're seeing.

Thank you. Thanks, Luke. Our next question comes from Cesar Medina from Morgan Stanley. Hi, Medina.

Hey, thanks for taking my questions and congrats on the results. Again, boring question, but can you confirm what you mentioned that 4% of your revenues in the first half are linked to this new pricing mechanism? And if that is correct, how much is this on the pipeline?

Yeah, 40% of the new sales, Medina. Thank you for your question because we measure bookings and also revenue, right? So I mentioned in our last call, 40% now of everything we sold in the first half of the year are now based on new revenue. But we have a lot of long-term contours that we are converting more incrementally to this new model. So I estimate that it will take 18 months, around 18 months, to have everything repriced in the new model as we renew and we compound the new sales with the renew of the current engagement. So that's why we are saying the increase in our gross margin will be sequentially, incrementally, sequentially along the next quarters. Because we have the new sales pushing for the new margin level, but also an effort on converting, let's say, legacy engagements into the new commercial models and margin potential.

To make sure, do you expect within the next 18 months, you will be 100% under the new revenue scheme?

Yeah, but considering the new is a combination, there is some part of what we do that is time material is very appropriate. And even FDEs, the now famous for deploying engineers, are time material by design. So it's not 100% in a single model. We see a combination of five different, even in a single engagement, normally we have two or three components. But we will be leaving this new territory in terms of contribution margin in a time frame of 18 months under the current market conditions and if we continue to succeed on our journey of introducing these new models.

Okay, thank you so much and congrats again on the results.

Thanks, Medina. Thanks, Medina.

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.

Sure. Thanks, Bruno, Stanley, Eduardo. Thank you all for joining us again today. And again, I need to thank all CEOs around the world. Thank you for your hard work and dedication. and I'm glad that you are seeing our transformation happening. And, of course, a special thank you for our clients and to trust CIT as the AI deployment and innovation partner. So, that's it. We'll see you soon. Stay well.

Bye-bye.