TOTVS (TOTS3) investor relations material

Executive summary

• Consolidated net revenue exceeded R$1.5 billion in Q4 2025, up 16% year-over-year, and surpassed R$5.7 billion for the full year, reflecting strong recurring revenue growth and operational momentum.

• Adjusted EBITDA reached R$409 million in Q4 2025, up 24% year-over-year, with margin expansion to 27.1%; full-year adjusted EBITDA grew 22%.

• Adjusted net income totaled R$258 million in Q4 2025 (+14% y/y), and R$910 million for the year (+26% y/y), with EPS up 25%.

• SaaS and cloud revenue grew 24% in Q4 and 28% for the year, with strong sales and migration to the cloud.

• Official launch of LYNN, the first proprietary AI foundation in Brazil, with significant CapEx planned for AI and cloud initiatives.

Financial highlights

• Recurring revenue increased 18% year-over-year in Q4 2025, now 91% of total revenue, and rose 20% for the full year.

• Management and RD SaaS revenue rose 22%, with BRL 200 million net ARR addition in the quarter.

• EBITDA margin improved by 170 basis points year-over-year in Q4 2025, reaching 27.1%; full-year margin was 26.2%.

• TechFin segment's adjusted EBITDA grew 43% year-over-year, with margin up from 10.6% to 13.4%.

• Free Cash Flow in Q4 2025 was R$317 million (+19% y/y); full year reached R$889 million (+21% y/y), converting 98% of Adjusted Net Income.

Outlook and guidance

• Management expects continued margin improvement and accelerated AI-driven revenue growth, with 26% margin seen as a strong year ahead.

• Integration of Linx expected to bring significant synergies and value extraction.

• AI and cloud investments to accelerate, with R$600 million CapEx planned over four years.

• Tax reform seen as both a challenge and opportunity, with ongoing client support and product updates.