Technos (TECN3) Q3 2024 earnings summary

Executive summary

• Net revenue reached R$94.7 million in 3Q24, up 17.8% year-over-year, driven by strong sales across most brands and channels, resulting in market share gains in traditional watches.

• Gross profit increased 15.0% to R$52.5 million, with gross margin at 55.4%, down 1.3 p.p. due to FX impacts and product mix.

• Adjusted EBITDA rose 5.0% to R$21.1 million, marking the 15th consecutive quarter of growth.

• Net income was R$12.9 million, stable year-over-year, as sales growth offset the absence of prior year non-recurring gains.

• Net cash position improved to R$17.5 million at quarter-end, with gross debt of R$107 million and average maturity of 21 months.

Financial highlights

• Gross revenue for 3Q24 was R$109.7 million, up 19.3% year-over-year; net revenue up 17.8%.

• Gross margin for the quarter was 55.4%, a decrease of 1.3 p.p. year-over-year, mainly due to FX and inventory provisions.

• SG&A expenses rose 16.5% to R$36.7 million, mainly from higher sales-related costs and marketing.

• Adjusted EBITDA margin for 3Q24 was 22.2%, down from 24.9% in 3Q23.

• Net cash position at R$17.5 million, with cash of R$124.5 million and gross debt of R$107.0 million.

Outlook and guidance

• Management remains focused on defending healthy margins through cost rationalization, selective price increases, and FX hedging.

• Strategy targets market share gains in traditional watches and expansion in smartwatches.

• Efficiency gains and disciplined expense management are expected to support future operational improvements.