Raia Drogasil (RADL3) Q1 2025 earnings summary

Executive summary

• Gross revenue reached R$10.8 billion in 1Q25, up 10.8% year-over-year, but below targets due to calendar effects and lower demand.

• 75 new pharmacies opened (20% more than 1Q24), 4 closed, totaling 3,301 units; national market share increased by 0.4 pp to 16.6%, with gains in all regions.

• Digital sales grew 40% year-over-year to R$2.2 billion, reaching 21.8% penetration; health services delivered 2.1 million services across 2,500 health hubs.

• NPS remained high at 90, with nearly 50 million active customers in the last 12 months.

• Margins and net income declined year-over-year, impacted by calendar effects, increased losses, and new tax regulations.

Financial highlights

• Adjusted EBITDA was R$644 million (6.0% margin), down 1.0 pp year-over-year; adjusted net income was R$177 million (1.6% margin), down 0.6 pp.

• Gross margin contracted to 26.6% (down 0.6 pp), mainly due to inventory losses and competitive investments.

• Free cash flow was negative at R$123.8 million; total cash consumption was R$162.6 million.

• Net debt stood at R$3.5 billion, with leverage at 1.2x adjusted EBITDA.

• Operating cash flow was R$139.4 million; CAPEX totaled R$263.2 million, mainly for new stores and technology.

Outlook and guidance

• Guidance for 2025 maintained at 330–350 gross pharmacy openings, with focus on sustainable expansion and digital growth.

• Management expects continued margin pressure in 2Q25 due to calendar effects and lower CMED adjustment, but aims for recovery through execution improvements and targeted promotions.

• Ongoing action plans target sales acceleration, customer recovery, digital enhancements, and operational efficiency.