Locaweb Serviços de Internet (LWSA3) Q4 2024 earnings summary

Executive summary

• 2024 marked a pivotal year with a strategic focus on profitability, operational efficiency, and cash generation, following a period of M&A-driven expansion.

• Achieved strong operational fundamentals, including double-digit growth in GMV and subscriber base, margin expansion, and positive operating cash generation.

• Completed Squid restructuring and set a clear path for growth reacceleration in 2025, with product simplification and innovation in omnichannel and AI-driven tools.

• Over 70 million users engaged with the ecosystem, and the subscriber base grew 4.8% to 193,200.

• Net income reached R$42.2 million in 2024, reversing a loss of R$73.7 million in 2023.

Financial highlights

• Consolidated net revenue grew 6% year-over-year to R$1.37 billion in 2024; excluding Squid, revenue rose 10.4%.

• Adjusted EBITDA increased 24.2% to R$281.4 million, with margin expanding to 20.5% in 2024 and 22.3% in 4Q24.

• Gross profit increased 9.6% to R$655.0 million, with consolidated gross margin up 1.6 p.p. to 47.8%.

• Free cash flow after CapEx was R$33.1 million for 2024.

• Cash and equivalents at year-end were R$447.4 million, with net cash (ex-earnouts) of R$100.0 million.

Outlook and guidance

• 2025 priorities include growth reacceleration, sustained profitability, and enhanced shareholder returns, leveraging integrated assets and omnichannel strategies.

• No significant incremental investment is planned; growth will be driven by existing assets and operational discipline.

• Earnout obligations resolved, removing a key uncertainty for future periods and leading to clearer reporting.

• Operational restructuring and integration of acquisitions are expected to yield fiscal benefits and cost synergies in 2025.