Locaweb Serviços de Internet (LWSA3) Q4 2025 earnings summary

Executive summary

• Net revenue grew 11.1% in Q4 2025 year-over-year and 10.3% for 2025, driven by ecosystem evolution, increased customer monetization, and integrated product and AI advancements.

• Adjusted EBITDA margin expanded to 25.3% in Q4 2025 (+1.6 p.p. YoY), with strong profitability and operational efficiency gains.

• Free cash flow reached R$224.8 million in 2025, up 77.7% YoY in Q4, supporting financial flexibility and high FCF yield.

• Significant progress in artificial intelligence, boosting customer-facing products, internal productivity, and operational synergies.

• Strategic focus sharpened with divestitures of Squid and Nextios, concentrating on profitable, synergistic operations.

Financial highlights

• 2025 consolidated net revenue was R$1,488.5 million (+10.3% YoY); Q4 2025 net revenue was R$381.5 million (+11.1% YoY).

• Adjusted EBITDA for 2025 was R$329.7 million (22.1% margin, +1.3 p.p. YoY); Q4 2025 adjusted EBITDA was R$96.6 million (25.3% margin, +18.7% YoY).

• Free cash flow for 2025 totaled R$224.8 million (15.1% margin); Q4 2025 FCF margin was 16.7%.

• Commerce revenue grew 16.4% YoY in Q4 2025 to R$279.7 million; commerce adjusted EBITDA rose 27.9% to R$72.3 million (25.9% margin).

• Cash and cash equivalents at year-end 2025 were R$371.9 million; net cash position was R$250.6 million.

Outlook and guidance

• Management expects continued double-digit net revenue growth, margin expansion, and robust cash generation, leveraging ecosystem expansion and AI-driven efficiency.

• Strategic focus remains on scalable, profitable businesses and further integration of the solutions ecosystem.

• Cautious optimism for 2026, monitoring macroeconomic factors, seasonality, and election-year impacts.

• Cloud operations and integrated solutions seen as major opportunities, with early customer adoption and strong cost advantages.