The plans of Brazil's BRQ to keep growing this year

Brazil’s BRQ Digital Solutions, one of the largest digital services companies in the country, bets on the expansion of projects with existing clients, financial solutions and on geographic diversification to continue growing amid turbulent times. 

“There was a boom in technology consumption in 2020 and 2021 and a slowdown in 2022 and now in 2023. But technology is a wave, the demand for digital transformation continues,” CEO Benjamin Quadros (pictured) told BNamericas.

Founded 30 years ago, BRQ is on track to break the 1bn-real (US$192mn) threshold in annual revenue, which could occur by the end of this year.

It ended 2022 with 750mn reais in sales, up 20%. While acknowledging that the market is more challenging this year, Quadros targets double-digit growth again.

Despite macroeconomic headwinds, with rises in opex and financial costs, the company managed to increase its annual net profit to 85.4mn reais, up from 40.2mn reais.

2023 business focuses include projects with financial institutions for solutions in the context of open banking (or open finance) and digitization of the customer experience, with integration of the companies' channels (omnichannel).

BRQ also intends to boost its US operations, where Quadros still sees an untapped market.

According to Quadros, BRQ’s customer portfolio includes 150 companies in eight countries. It employs 3,300 professionals, mostly on a remote basis.

Part of the client base is dispersed across Latin America, although most customers are concentrated in Brazil and the US, and some in Mexico.

“For Latin America and other countries around the world, we have more of a follow-the-customer strategy, rather than a country strategy per se. We understand that there are many particularities to take into account in each market and that this is the best strategy. It's what has worked.”

The company focuses on mid-sized and large corporations. Clients include Telefónica, Claro and TIM, Citibank, Bank of America, Itaú, Bradesco and Santander, and Petrobras, Raízen and Eletrobras.

According to Quadros, BRQ has an average relationship time with its customers of 11 years.

HEADCOUNT AND ACQUISITIONS

The company has 150 positions open, but in a good year it usually hires around 350, Quadros said. Unlike other sector players, BRQ did not implement mass layoffs, however.

BRQ has not yet experienced a reduction in demand, even though it is not growing as much as during the digitization boom in the pandemic years, Quadros said.

Any headcount adjustments, according to him, will therefore depend on this panorama.

Last year, the company completed the acquisitions of data analytics and digital transformation services company QDOIS, and TOPi, focused on CRM and a Salesforce partner in Brazil.

BRQ’s chief digital officer, Rodrigo Frizzi, said that the acquisitions strengthen the company’s digital services delivery system, especially in the areas of analytics, cloud and salesforce.

New acquisitions are not ruled out, according to Quadros, but BRQ intends to be more careful this year due to the hike in capital costs.

There are other roadblocks ahead, though, such as increased competition and a potential re-evaluation of projects by customers. 

Among BRQ's main competitors, although not necessarily for all segments and portfolios, are other Brazilian IT multinationals, such as Stefanini, Resource and Totvs.

IDC forecasts the Brazilian ICT market to grow by 5% in 2023, reaching US$80bn in sales.

The IT sector, specifically, is projected to grow 6.2%, in a scenario of adjustment and redirection of expenses, but favored by the consumption of technology by companies (B2B IT), which is seen growing by 8.7%, according to IDC.

The software segment will grow by 15.1% in 2023, driven by security solutions, data management, AI and customer experience. Half of the amount that would be spent on software in Brazil will go to the SaaS (cloud) model, said IDC.