Locaweb Serviços de Internet (LWSA3) Q4 2025 earnings summary

Executive summary

• Net revenue grew 10.3% year-over-year to R$1,488.5 million, with Q4 2025 revenue up 11.1%, driven by ecosystem development, Commerce segment strength, and increased customer monetization.

• Adjusted EBITDA rose 17.2% to R$329.7 million for 2025, with Q4 margin at 25.3%, reflecting operational leverage, cost discipline, and efficiency gains.

• Free cash flow after Capex surged 580% year-over-year to R$224.8 million, with Q4 free cash flow up nearly 80%.

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

• The year ended with a net loss of R$225.5 million, mainly due to a one-time impairment related to the sale of Wake Creators.

Financial highlights

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

• Adjusted EBITDA for 2025 was R$329.7 million (+17.2%), margin 22.1%; Q4 adjusted EBITDA was R$96.6 million (+18.7%), margin 25.3%.

• Free cash flow for 2025 totaled R$224.8 million (15.1% margin); Q4 free cash flow was R$63.6 million (+77.7% YoY).

• Commerce segment net revenue grew 15.3% to R$1,073.2 million in 2025; Q4 commerce revenue up 16.4% to R$279.7 million.

• Adjusted net income was R$204.6 million (+36.5% YoY); Q4 adjusted net income R$69.0 million (+60.9% YoY).

Outlook and guidance

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

• Strategic focus remains on scalable, profitable businesses, further integration of solutions, and capturing fiscal benefits from reorganizations.

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