Locaweb Serviços de Internet (LWSA3) Q1 2025 earnings summary

Executive summary

• Achieved accelerated growth in 1Q25, focusing on profitability, cash generation, and customer-centric product strategy, supported by ecosystem integration and significant shareholder returns.

• Net revenue grew 8.8% year-over-year to R$348.9 million, driven by strong Commerce performance and stable SaaS operations.

• Adjusted EBITDA rose 15.1% year-over-year to R$70.2 million, with margin expansion to 20.1%.

• Ecosystem GMV reached R$18.2 billion (+14.5% YoY); TPV up 15.7% YoY to R$2.0 billion; subscriber base up 6.8%.

• Strategic planning, organizational changes, and integration of ERP, logistics, and AI tools are enhancing SME value and operational efficiency.

Financial highlights

• Consolidated net revenue increased 8.8% YoY to R$348.9 million; Commerce net revenue up 12.6% YoY to R$244.2 million; SaaS revenue up 0.9% YoY.

• Adjusted EBITDA increased 15.1% YoY to R$70.2 million, with margin improving to 20.1%.

• Cash generation (adjusted EBITDA minus CapEx and financial expenses) rose 46% YoY to R$34.6 million.

• Net income was R$14.8 million, down 39.5% YoY; adjusted net income increased 28.4% to R$34.8 million.

• Ended Q1 with a cash balance of R$399.3 million and net cash (ex-earnouts) of R$45.6 million.

Outlook and guidance

• Growth in Commerce and ecosystem revenues expected to accelerate through 2025, driven by cross-selling, integrated product offerings, and operational synergies.

• CapEx for the year expected to normalize at Q4 2024 levels, with some quarterly fluctuations.

• Strategic plan aims for sustainable growth, balancing revenue expansion with operational efficiency over the next five years.

• No plans for asset divestment; focus remains on unlocking value from existing assets and further integration.