TOTVS (TOTS3) Q1 2026 earnings summary

Executive summary

• Net revenue reached up to R$1.70 billion in 1Q26, growing between 16% and 22% year-over-year, driven by strong recurring revenue and the initial consolidation of Linx.

• Adjusted EBITDA rose as much as 29% year-over-year to R$472.7 million, with margins expanding to as high as 28.5%.

• Adjusted net income was up to R$260.9 million, with EPS increasing over 21% year-over-year.

• Linx acquisition completed and integration underway, with results consolidated from March 2026 and expected to drive further synergies.

• AI and cloud initiatives, including the launch of proprietary platforms and IaaS, are driving operational efficiency and market expansion.

Financial highlights

• SaaS revenue grew up to 24% year-over-year, with recurring revenue representing over 91% of total revenue.

• Adjusted EBITDA margin reached up to 28.5%, with management segment margin surpassing 30% for the first time.

• RD Station ARR advanced up to 22% year-over-year, with SaaS revenue up to 21% and EBITDA margin at 14.4%.

• Techfin credit production reached BRL 3.3 billion, with net funding revenue up 11% year-over-year, but EBITDA margin declined due to higher credit loss provisions.

• Free cash flow rose 70% year-over-year to R$201 million.

Outlook and guidance

• Margin expansion is expected to continue, driven by recurring revenue growth, operational leverage, and AI integration.

• Linx is expected to converge towards management segment margins as integration progresses.

• IaaS launch and AI-driven transformation are seen as significant TAM expansion opportunities, especially for larger customers.