Raia Drogasil (RADL3) Q2 2025 earnings summary

Executive summary

• Gross revenue reached R$11.7 billion in 2Q25, up 12.0% year-over-year, with retail growth of 13.1% and digital sales surging 52% to R$2.6 billion, now 24.1% of retail sales.

• Adjusted EBITDA was R$885 million (7.6% margin), down 0.3 pp year-over-year but up 1.6 pp sequentially.

• Adjusted net income grew 12.9% to R$403 million (3.5% margin, up 0.1 pp year-over-year).

• Pharmacy network expanded to 3,371 units, with 70 new openings and over 50 million active customers in the last 12 months.

• National market share increased by 0.7 pp to 16.4%, with gains in all regions and leadership in health services and vaccines.

Financial highlights

• Gross profit was R$3.2 billion (27.4% margin), down 0.8 pp year-over-year due to lower inflationary gains and higher GLP-1 product mix.

• Selling expenses were R$2.0 billion (17.3% of revenue), up 0.1 pp, while G&A expenses fell to 2.6% of revenue, a 0.5 pp improvement.

• Free cash flow was R$36.9 million; total cash consumption was R$357.2 million.

• Net debt leverage at 1.3x LTM adjusted EBITDA, with net debt at R$3.18 billion.

• Effective tax rate dropped to 6.3% due to reversal of provisions related to investment subsidies.

Outlook and guidance

• Guidance for 2025 reaffirmed: 330–350 gross pharmacy openings, with focus on São Paulo and popular/hybrid formats.

• Ongoing action plan targets sales acceleration, inventory and cash cycle reduction, and leaner G&A.

• 25.3% of stores are still maturing, indicating further revenue and margin potential.

• Anticipate further improvements in inventory losses and gross margin as new initiatives take effect in the third quarter.

• Continued investment in digital and staff to support growth and customer experience.