Infracommerce CXaaS (IFCM3) Q3 2023 earnings summary

Executive summary

• 3Q23 net revenue rose 35.2% YoY to R$290.0m, with 20% organic growth; GMV increased 18.7% to R$3.83bn and adjusted EBITDA rose 164.4% to R$65.0m, with a 22.4% margin.

• Growth and margin gains came despite a 7% contraction in Brazilian e-commerce; 3Q23 operating cash flow was R$97.2m.

• 9M23 adjusted EBITDA less capex was R$59.2m.

Financial highlights

• 9M23 net revenue increased 27.7% YoY to R$804.0m; gross profit rose 32.1% to R$344.5m.

• 3Q23 gross profit was R$124.5m, up 42.0% YoY, and gross margin expanded 2.1 p.p. to 42.9%.

• 3Q23 EBIT was R$12.2m versus a R$17.4m loss in 3Q22; reported net loss narrowed to R$52.4m from R$72.9m.

• Adjusted net loss was R$22.6m versus R$38.5m in 3Q22; excluding R$25.3m of interest on bank debt and M&A liabilities, adjusted net income would have been R$2.7m.

• 9M23 adjusted EBITDA was R$143.9m, up 140.1%; adjusted net loss was R$110.1m versus R$101.9m in 9M22.

Outlook and guidance

• Priorities included organic growth with new and existing clients, capturing M&A synergies, expanding EBITDA margin and generating recurring operating cash.

• Management expected Q4 to be the historically strongest quarter, with preparations for Black Friday and customer sales strategies.

• Break-even initiatives targeted an additional R$42m of savings by year-end 2023; updated annualized savings potential was R$156m–R$176m.

• Sustainable EBITDA margin baseline was expected at 20%–22%; no formal 2024–2025 net income or 2024 EBITDA-less-capex guidance was provided.

• Short-term commitments were expected to be managed through operating performance and relationships with banks and major shareholders while awaiting improved market conditions for capital-structure adjustments.