Dotz (DOTZ3) Q2 2023 earnings summary

Executive summary

• Integrated loyalty, Super App and TechFin strategy supported customer engagement and repeat monetization, while TechFin growth and lower expenses narrowed the adjusted EBITDA loss.

• Total billings were R$63.4 million in 2Q23, down 1.1% YoY, as delayed promotional campaigns and weaker e-commerce activity offset TechFin growth.

• Digital reach reached 5.2 million app downloads and 1.6 million registered users by June 2023.

Financial highlights

• 2Q23 total billings were R$63.4 million, down 1.1% YoY; 1H23 billings were R$129.6 million, down 4.5% YoY.

• Consolidated net revenue was R$34.6 million in 2Q23, up 23.2% YoY; 1H23 revenue was R$64.9 million, up 5.0% YoY.

• Net revenue before redemption costs was R$59.7 million in 2Q23, down 3.9% YoY, and R$119.7 million in 1H23, down 8.8% YoY.

• Net loss was R$18.6 million in 2Q23 versus R$28.2 million in 2Q22; 1H23 net loss was R$34.1 million versus R$44.9 million in 1H22.

• Adjusted EBITDA loss was R$9.8 million in 2Q23 and R$25.7 million in 1H23; reported EBITDA loss was R$22.2 million in 2Q23 and R$36.6 million in 1H23.

Outlook and guidance

• 2H23 priorities included pursuing EBITDA breakeven, expanding coalition partners, improving app engagement and cross-selling, and launching integrated Dotz BNPL.

• June EBITDA was described as close to breakeven; BNPL was planned to give retail customers credit at checkout through the SuperApp.

• Promotional campaign mechanics were being prepared for 2H23, with negotiations underway for campaigns in coming quarters.