Locaweb Serviços de Internet (LWSA3) Q3 2025 earnings summary

Executive summary

• Achieved accelerated growth in Q3 2025, with net revenue up 10.9% year-over-year and strong operational fundamentals, driven by a 16.6% increase in the Commerce segment and robust GMV and TPV growth.

• Subscriber base expanded to approximately 204,700, up 7.0% year-over-year, with ARPU in Commerce up 13%.

• Significant divestments of non-core assets (Squid/Wake Creators and Nextios) sharpened strategic focus and improved capital allocation.

• Delivered major product enhancements, including integration with TikTok Shop, TEMU, and launch of a digital account for SMEs.

• Focused on growth acceleration, cash generation, product innovation, and organizational simplification.

Financial highlights

• Net revenue reached R$387.4 million (+10.9% YoY); Commerce net revenue was R$283.4 million (+16.6% YoY).

• Adjusted EBITDA was R$87.0 million (+18.1% YoY), with margin up 1.4 p.p. to 22.5%.

• Free cash flow after capex was R$161.2 million YTD (14.6% margin), with R$70.5 million generated in Q3.

• GMV for Q3 was R$20.3 billion (+16.8% YoY); TPV reached R$2.3 billion (+14.9% YoY).

• Adjusted net income was R$56.6 million (+52.9% YoY); reported net loss of R$287.8 million due to non-cash divestment impacts.

Outlook and guidance

• Management expects continued ARPU growth above inflation, supported by product improvements and digitalization trends.

• Focus remains on operational efficiency, recurring revenue, and margin improvement post-divestments.

• Black Friday and seasonal trends anticipated to support strong Q4 performance.

• Digital Account and expanded financial services in testing to strengthen SMB ecosystem.

• Disciplined execution and efficiency initiatives to drive profitable operations and recurring revenue streams.