Lavvi Empreendimentos Imobiliários (LAVV3) Q1 2026 earnings summary

Executive summary

• Net revenue reached R$ 373 million in 1Q26, up 11% year-over-year but down 30% sequentially, with net income of R$ 70 million and a net margin of 18.7%.

• Annualized ROE stood at 28% at the end of 1Q26, reflecting portfolio consistency.

• Backlog revenue totaled R$ 2.8 billion, up 15% year-over-year, with a gross margin of 38%.

• No new launches or deliveries in the quarter, but major launches, including Jardim da Hípica, are scheduled for 2Q26.

• Inventory stood at R$ 2.5 billion, with a landbank of R$ 10.4 billion supporting future launches.

Financial highlights

• Adjusted gross margin was 34.9%, down 4.4 p.p. year-over-year and 0.7 p.p. sequentially.

• Adjusted EBITDA reached R$ 83 million, down 17% year-over-year and 41% sequentially, with a margin of 22.2%.

• Net debt totaled R$ 468 million as of March, with a Net Debt/Equity ratio of 28.8%.

• Cash burn was R$ 44 million, mainly due to land investments; excluding land, cash generation was R$ 30 million.

• Dividend payments of R$ 30 million made in 1Q26, with another R$ 30 million scheduled for May.

Outlook and guidance

• Margins are expected to recover in the second half of 2026 as new launches occur.

• The company is preparing for its largest launch ever in 2Q26, with significant marketing investments in 1Q26.

• Landbank supports launches through 2028, with R$ 10.4 billion in potential PSV and 87% acquired in cash.

• Management is monitoring regulatory changes, including tax reform and fiscal benefit reductions, with no material quantitative impact estimated yet.

• Receivables indexed to INCC provide a natural hedge against inflationary pressures.