Méliuz (CASH3) Q2 2023 earnings summary

Executive summary

• Q2 net revenue was R$72.2m, up 1% YoY; total net loss narrowed to R$15.5m from R$28.2m, including R$9.2m from discontinued operations.

• Priorities included reducing costs, integrating financial products with Banco BV, and pursuing operational break-even; parent-level breakeven was an internal H2 target.

• A R$210.0m agreement to sell Bankly and Acessopar to Banco BV was signed, with closing subject to regulatory approvals.

Financial highlights

• Q2 consolidated operating expenses were R$86.1m, down 14% YoY and 7% QoQ; parent expenses were R$61.5m, down from R$76.4m in Q1 and R$92.4m in Q4 2022.

• Consolidated EBITDA was -R$14.1m versus -R$45.9m YoY; adjusted EBITDA was -R$11.7m versus -R$27.0m.

• Q2 consolidated net loss was R$15.5m versus R$28.2m YoY; net loss from continuing operations was R$6.3m.

• Adjusted EBITDA losses improved 57% consolidated and 77% at the parent level; parent EBITDA loss narrowed 81% YoY to R$8.7m.

• Cash, cash equivalents and securities excluding Bankly were R$395.8m at quarter-end, versus R$422.5m in Q1.

Outlook and guidance

• Parent-level operational breakeven remained an internal H2 target; cash generation was expected from 2024.

• Cash impact from operations was expected to decrease and turn positive in H2 2023; expense reductions were described as sustainable.

• H2 revenue growth was expected from seasonal e-commerce activity, Banco BV account activations and card issuance; initial card ramp-up results were expected from Q3.

• Insurance, investment and other account-related services were expected from Q4, with further scaling in 2024.