Lavvi Empreendimentos Imobiliários (LAVV3) Q2 2025 earnings summary

Executive summary

• Net revenue reached R$ 482 million in 2Q25, up 63% year-over-year, and R$ 817 million in 1H25, up 41% year-over-year.

• Net income for 2Q25 was R$ 119 million, an 80% increase year-over-year, with a net margin of 24.6%; 1H25 net income was R$ 205 million, up 51% year-over-year.

• Major launches included Le Six (R$ 1 billion PSV, 50% sold in a quarter) and Soleil (R$ 366 million PSV, 55% sold to date), both in São Paulo, with strong initial sales performance.

• Backlog revenue rose to R$ 2.5 billion, up 38% from 2Q24, with a gross margin of 36.4%.

• Annualized ROE reached 28% by the end of 2Q25, more than doubling since 2022.

Financial highlights

• Adjusted gross margin was 36.3% in 2Q25 and 37.5% YTD, both higher year-over-year.

• Adjusted EBITDA reached R$ 146 million in 2Q25, up 92% year-over-year, with a margin of 30.3%.

• Net debt stood at R$ 49 million as of June 30, 2025, with a Net Debt/Shareholders' Equity ratio of 2.7%.

• Adjusted cash burn was R$ 31 million in 2Q25; excluding land, cash generation was R$ 246 million YTD.

• Net margin has remained consistently above 20% since IPO in 2020.

Outlook and guidance

• Launch pipeline includes a partnership in São Caetano (R$ 600 million PSV) and two Minha Casa, Minha Vida projects.

• Launches to be evaluated quarter by quarter, with focus on operational health.

• Gross margin expected to remain slightly above last year's level, depending on product mix.

• Despite a 25% year-over-year decline in YTD sales, management maintains a healthy outlook for the year.

• Management confirmed business continuity and did not identify operational uncertainties.