Infracommerce CXaaS (IFCM3) Q1 2023 earnings summary

Executive summary

• Q1 net revenue rose 10.1% YoY to R$214.2m and GMV increased 18.2% to R$3.347bn; adjusted EBITDA grew 56.8% to R$26.0m.

• Profitability and cash generation became priorities as capex declined 31.3% YoY to R$32.2m and break-even measures advanced.

Financial highlights

• Gross profit rose 11.2% to R$90.8m, with gross margin up 0.4 p.p. to 42.4%.

• Net loss was R$79.9m versus R$59.6m in 1Q22; adjusted net loss was R$61.4m versus R$31.9m.

• Net financial expense increased to R$60.5m from R$34.8m, contributing to the net loss.

• Operating cash flow used R$80.2m versus R$2.9m used in 1Q22; ending cash and equivalents were R$253.3m.

Outlook and guidance

• FY2023 guidance was reaffirmed at adjusted EBITDA of R$150m–R$170m and capex of R$120m–R$140m; EBITDA is expected to exceed capex.

• Efficiency and contract-review measures target R$10m–R$12m in monthly expense reductions from May through end-Q3 2023, with annualized synergies of up to R$140m.

• FY2023 investment is expected to approach maintenance levels; positive cash generation for debt amortization after financial expenses is targeted from 2024 onward.

• First-half revenue growth is expected below historical rates following a significant client-services reduction; 54 new clients are expected to contribute as projects go live.