Locaweb Serviços de Internet (LWSA3) Q1 2026 earnings summary

Executive summary

• Net revenue grew 10% year-over-year to R$362.8 million, driven by strong performance in commerce and subscription revenue, ecosystem evolution, and client base monetization.

• Commerce net revenue increased 14.3% year-over-year to R$262.1 million, supported by client base expansion, higher ARPU, and increased subscriptions.

• Adjusted EBITDA rose 28.4% year-over-year to R$91.0 million, with margin improving by 3.6 percentage points to 25.1%.

• Free cash flow reached R$80.6 million, representing a 22.2% margin and reversing a negative result in 1Q25.

• Over R$199.3 million returned to shareholders in the last 12 months via dividends, capital reduction, and share buybacks.

Financial highlights

• Ecosystem GMV grew 11.5% year-over-year to R$20.3 billion; TPV increased 10.1% to R$2.2 billion.

• Platform subscribers rose 7.7% to 211,000, with 7,000 net additions since December.

• Platform subscription net revenue climbed 18.9% to R$145.6 million; BeOnline SaaS revenue stable at R$100.7 million.

• Consolidated gross profit was R$175.5 million (+8.0% YoY), with gross margin up 1.8 p.p. to 48.4%.

• Adjusted net income was R$54.0 million (+55.0% YoY), with margin up 4.9 p.p. to 14.9%.

Outlook and guidance

• No further headcount reductions expected; slight increases possible as growth accelerates.

• April performance remained strong in subscriptions and monetization, with churn under control.

• Transactional GMV faced seasonal challenges in April but no change in overall trends anticipated.

• Medium-term focus on innovation and new product rollouts, especially in BeOnline and cloud services, with AI-driven operational efficiency and product enhancements expected to support margin expansion.

• Full normalization of a key Commerce Enterprise client expected by early 3Q26 after operational loss in 1Q26.