TOTVS (TOTS3) investor relations material

Executive summary

• Net revenue reached R$1.5 billion in Q2, up 17% year-over-year, driven by strong recurring and SaaS revenue growth.

• Adjusted net income surged 51% year-over-year, with EBITDA up 23% and margin expansion supported by operational efficiency and tax benefits.

• Announced acquisition of Linx/Lynx, expected to enhance ecosystem, competitive differentiation, and support a new growth cycle.

• Management remains focused on scaling recurring revenue, leveraging digitalization, and increasing customer relevance amid tax reform.

• Management expects continued operational leverage and margin expansion if current inflation and pricing dynamics persist.

Financial highlights

• Recurring revenue grew 20% year-over-year to R$1,357 million, with SaaS/cloud revenue up 25%.

• Adjusted EBITDA reached R$363 million (+23% y/y), with margin expanding by 120 basis points to 24.4%.

• Adjusted net income in Q2 was R$218 million, 2.8x higher year-over-year, and 4.5x higher YTD.

• Free cash flow reached R$196 million (+25% y/y, +51% q/q).

• ROIC increased by 350 basis points year-over-year to 20.1%.

Outlook and guidance

• Management anticipates continued growth in recurring revenue, leveraging digitalization and tax reform opportunities.

• Techfin to further optimize funding structure in Q3, supporting future growth.

• No major changes anticipated in management post-Linx/Lynx acquisition, but significant synergy opportunities expected.

• Focus on maintaining strong performance in H2 2025 and setting the stage for a successful 2026.

• Simplicity and customer relevance remain ongoing strategic drivers.