Armac Locação Logística e Serviços (ARML3) Q2 2025 earnings summary

Executive summary

• Gross revenue reached R$491.4 million in 2Q25, up 8.1% year-over-year, driven by strong asset sales but offset by a 3.2% decline in rental revenue due to contract demobilizations.

• Adjusted Rental EBITDA was R$168.5 million, stable year-over-year, with margin improving to 45.6% (+1.0 p.p. YoY and +3.7 p.p. QoQ), reflecting cost-cutting and portfolio optimization.

• Net loss of R$6.7 million in 2Q25, compared to net income of R$50.4 million in 2Q24, mainly due to non-recurring costs, lower rental revenue, and higher financial expenses.

• Operating cash flow for 1H25 was R$460.1 million, up 94.4% year-over-year, with annualized recurring managerial operating cash flow at R$540 million, excluding asset sales.

• Strategic transformation completed, focusing on business unit segmentation, contract portfolio review, and data-driven fleet management.

Financial highlights

• Net revenue was R$451.5 million in 2Q25, up 10.7% year-over-year.

• Rental revenue was R$409.5 million, down 3.2% year-over-year, while asset sales revenue surged to R$74.9 million, up 274.2% year-over-year.

• Adjusted EBITDA including consortium and asset sales grew 13.7% year-over-year in 2Q25.

• CAPEX for 2Q25 was R$171.4 million, down 46.0% year-over-year, focused on fleet renewal and maintenance.

• Used asset sales reached R$74.9 million, with asset sales in 1H25 totaling R$138.5 million, a 206.1% increase over 1H24.

Outlook and guidance

• Management expects continued margin recovery as cost reductions and portfolio optimization take effect, with EBITDA margin expected to sustainably exceed 50% in coming months.

• Utilization rate improved to 72.7% in 2Q25, with expectations to return to 80% by year-end, supporting revenue stabilization.

• Asset sales proceeds will be fully used for fleet renewal, targeting net-zero CAPEX and reduced financial obligations in 2025.

• Ongoing regional expansion and continuous fleet renewal planned, with no specific guidance on number of new stores or asset sales volume.