Locaweb Serviços de Internet (LWSA3) Q1 2025 earnings summary

Executive summary

• Focus in 2025 is on accelerating growth, maintaining profitability, and enhancing the customer journey, supported by a customer-centric product strategy and significant shareholder returns.

• Achieved accelerated growth in key operational metrics, net revenue, margin expansion, and strong operational cash generation in 1Q25 compared to 1Q24.

• Product strategy centers on integrated solutions for SMEs, leveraging ERP, logistics, and AI-driven tools.

• Strategic planning and organizational changes implemented to drive sustainable growth and operational efficiency.

• Shareholder returns in 2024 were significant, with continued buybacks and dividends in 2025.

Financial highlights

• Consolidated net revenue grew 8.8% year-over-year to R$348.9 million in Q1 2025; Commerce net revenue up 12.6% YoY.

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

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

• Ended Q1 with a cash position of R$399.3 million after significant buybacks and earnout payments.

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

Outlook and guidance

• Growth in commerce expected to accelerate through 2025, driven by cross-selling, integrated product offerings, and a strategic plan for sustainable growth over the next five years.

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

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

• Continued attention to market trends, innovation, and operational excellence to consolidate growth and strengthen competitive position.

• Focus on customer-centric solutions, user experience, and integration across business channels.