Direcional Engenharia (DIRR3) Q2 2025 earnings summary

Executive summary

• Achieved record net revenue of BRL 1.1 billion in 2Q25, up 26% year-over-year and 19% sequentially, with strong growth in launches and net sales volumes.

• Adjusted gross margin reached a historic high of 41.7% in 2Q25, up 20 bps from 1Q25 and 390 bps from 2Q24.

• Net income for 2Q25 was BRL 184 million, up 12% sequentially and 26% year-over-year, with an annualized ROE of 34%.

• Maintained strong sales momentum, high launch volumes, and disciplined cost control, supporting margin expansion and profitability.

• Continued focus on returning capital to shareholders, highlighted by a 100% dividend payout over 1H25 net profit and a 3-for-1 stock split.

Financial highlights

• Net revenue for 1H25 totaled BRL 2.0 billion, up 29% year-over-year.

• Adjusted gross profit for 2Q25 was BRL 444 million, up 20% sequentially and 39% year-over-year; adjusted EBITDA was BRL 274 million, with a margin of 25.8%.

• Cash generation in 2Q25 was BRL 395 million, with cash and equivalents plus financial investments totaling BRL 2.1 billion at quarter-end.

• Net cash position of BRL 138 million and leverage ratio of -5.6%.

• Dividend payout of BRL 347 million in 2Q25 (BRL 2.00/share), with over BRL 2.1 billion paid since IPO.

Outlook and guidance

• Management expects continued strong operational and financial performance, supported by a robust landbank and high contracted revenue to be recognized in future quarters.

• Backlog revenue of BRL 3.4 billion and backlog margin of 44.9% provide visibility for future results.

• Recent stock split and CRI issuance aim to enhance share liquidity and extend debt maturity.

• Second half of the year anticipated to be stronger, with more launches and approvals expected, especially in October and November.

• Optimism regarding demand and affordability, particularly due to eligibility for government housing programs.