Positivo Tecnologia (POS3) Q3 2024 earnings summary

Executive summary

• Gross revenue for 9M24 reached R$3.08 billion, up 10.7% YoY, but 3Q24 revenue fell 7.4% to R$957 million due to a weaker computer market, competition, FX volatility, and supply chain delays; services accounted for 19% of revenue, with strong Payment Solutions and Consumer segment growth.

• Integration of Algar Tech MSP progressing well, supporting diversification, with low churn, high NPS, and business acceleration in Colombia.

• Operational efficiency initiatives and price adjustments implemented to address margin pressures, with full impact expected in 2025.

• ESG achievements include Gold Certification from EcoVadis and the Brazilian GHG Protocol, providing competitive advantages.

• Cash generation in 9M24 was R$362 million, driven by working capital improvements, notably reductions in accounts receivable and inventory.

Financial highlights

• 3Q24 gross revenue: R$957 million (-7.4% YoY); 9M24: R$3.08 billion (+10.7% YoY).

• 3Q24 EBITDA: R$67 million (margin 8.2%, -6.1 p.p. YoY); 9M24 EBITDA: R$267 million (margin 10.1%, -3.0 p.p. YoY).

• 3Q24 net profit: R$2 million (margin 0.2%, -94% YoY); 9M24 net profit: R$71 million (margin 2.7%, +20.8% YoY).

• 3Q24 gross margin: 24.2% (-2.8 p.p. YoY); 9M24: 24.7% (-2.7 p.p. YoY).

• Inventory reduced to R$1,278 million in 3Q24; operating cash flow positive at R$83 million.

Outlook and guidance

• Annual gross revenue guidance maintained at R$4.0–4.5 billion (excluding Algar), with 4Q24 expected to be strong due to public sector projects and seasonal consumer demand.

• Margin pressures from higher costs and FX expected to persist in 4Q, but price normalization and cost reductions are underway.

• Backlog for public institutions exceeds R$600 million, mostly for 4Q24.