Direcional Engenharia (DIRR3) Q1 2025 earnings summary

Executive summary

• Achieved record adjusted gross margin of 41.5% in 1Q25, up 420 bps year-over-year and 210 bps sequentially from 4Q24.

• Net revenue reached BRL 894 million in 1Q25, up 34% year-over-year, marking the best first quarter in company history.

• Net income for 1Q25 was BRL 165 million, with a net margin of 18.4%.

• Annualized adjusted ROE reached 30% in 1Q25.

• Shares included in the Ibovespa index, reflecting increased market recognition.

Financial highlights

• Net revenue for 1Q25 was BRL 894 million (+34% YoY); LTM net revenue was BRL 3.6 billion (+45% YoY).

• Adjusted gross profit reached BRL 371 million in 1Q25, up 49% year-over-year; adjusted gross margin at 41.5%.

• Adjusted EBITDA was BRL 234 million (+42% YoY), with a margin of 26.2%.

• Net income for 1Q25 was BRL 165 million (+9% YoY); operational net income (excluding non-recurring items) was BRL 158 million (+32% YoY).

• Backlog revenue ended at BRL 3.1 billion (+62% YoY), with a backlog margin of 44.1%.

Outlook and guidance

• Recent changes to the Minha Casa, Minha Vida program are expected to expand the addressable market and improve financing conditions for customers.

• Management remains optimistic about leveraging market opportunities and maintaining operational efficiency.

• Company is well-positioned to benefit from increased purchasing power and market expansion.

• Forward-looking statements note sensitivity to Brazil's economic and political environment.