Locaweb Serviços de Internet (LWSA3) Q3 2024 earnings summary

Executive summary

• Achieved strong operational and financial performance in Q3 2024, with significant margin expansion and robust growth in key metrics despite a challenging macroeconomic environment for Brazilian retail and e-commerce.

• Operational fundamentals remain strong, with growth in own-store GMV, ecosystem GMV, consolidated GMV, and customer base, supported by cost control and operational leverage.

• Launched new products such as Tray POS, Wake, and Etus, enhancing omnichannel and unified commerce capabilities for SME clients and driving innovation and organic growth.

• Shareholder returns included over BRL 192 million via stock buybacks and dividends, with a major share buyback and R$40 million in dividends announced.

Financial highlights

• Consolidated net revenue reached BRL 349.3 million in Q3 2024, up 5.8% year-over-year and 4% sequentially; excluding Squid, annual growth was 11.7%.

• Gross profit grew 20.3% year-over-year to BRL 174.5 million, with gross margin expanding 6.0 p.p. to 49.9%.

• Adjusted EBITDA rose 36.2% to BRL 73.7 million, with margin up 4.7 p.p. to 21.1%.

• Net profit for Q3 2024 was BRL 16.9 million (net margin 4.8%), up 336.4% year-over-year; adjusted net profit was BRL 37.0 million (+52.7%).

• Free cash flow after CapEx was BRL 10.0 million in Q3 2024, down from BRL 65.3 million in Q3 2023.

Outlook and guidance

• Focus remains on leveraging existing assets, integrating products, and unlocking further value through structural allocation and cross-selling.

• Fiscal benefits from recent integrations expected to be realized starting in Q4.

• Continued emphasis on innovation, operational efficiency, and expanding AI capabilities to sustain growth and profitability.